BD to sue both NY Fed, RCBC over reserve heist: Muhith

Lawsuit by Jan 15

FE Report | Published: December 06, 2018 10:04:18 | Updated: December 31, 2018 11:49:40

A security man stands guard outside a branch of Rizal Commercial Banking Corporation (RCBC) in Paranaque city, Metro Manila, Philippines on August 2, 2016 — Reuters/File

Bangladesh will sue the Federal Reserve Bank of New York alongside the Rizal Commercial Banking Corporation (RCBC) of the Philippines to recover its stolen reserve funds.

The case will be filed before January 15 in New York and the central bank is working hard on it.

The case will be filed against the New York Fed also because it was supposed to stop the transaction, Finance Minister AMA Muhith said.

The initial transaction was held from the Fed though it made reference to Bangladesh, he said.

"But before we received the notification, some money was already transferred," Mr Muhith added.

He said this to the newsmen after a cabinet committee meeting at the secretariat on Wednesday.

"The RCBC will be the main respondent, because it didn't return the entire money," he mentioned.

"When a bank gets such money, it needs to be watchful. Immediately it should find out the source before releasing the fund," he said.

Terming the RCBC the 'main culprit' of the heist, Mr Muhith said the Fed also did not await a reply from the Bangladesh Bank (BB) before releasing it.

Replying to a query, Mr Muhith said categorically that the case will be filed before January 15 in New York. "Our main goal is to recover the money."

Asked whether the Fed will cooperate with Bangladesh if it is also included in the case as a respondent, he answered in the affirmative.

"I think they will cooperate with us, because the Fed is the custodian of funds belonging to many countries, including Bangladesh," Mr Muhith said.

"They have a special position globally. Our case will go in their favour, ultimately," he stated.

Asked whether litigation will put fund recovery into a lengthy procedure, Mr Muhith said Dhaka waited for long to settle the issue out of court.

"We sought a solution to the issue in many ways. We waited for steps from the Philippines," he added.

Mr Muhith said Sri Lanka would be with Bangladesh in the battle.

A portion of the stolen money went to Sri Lanka and they immediately returned it, he noted.

The hackers stole $101 million from the BB's reserves deposited with the US Fed in February 2016.

They channelled the money to bank accounts at the RCBC in Manila by placing fraudulent orders on the SWIFT payments system.

Nearly $20 million of the sum was recovered from Sri Lanka.

The lion's share of the booty landed in the Philippines and most of it was reported to have been squandered in casinos.

Latter, some $15 million more could be recovered from the Philippines.

Replying to another query, Mr Muhith said the GDP (gross domestic product) usually does not grow in an election year.

"But this fiscal there will be growth, and it will be good growth," he said.

"I think this year's growth in no case will be less than 7.0 per cent," he said.

The minister said project implementation may face a slow pace during election year because nobody pays proper attention.

As his attention was drawn to sluggishness in revenue collection this year, Mr Muhith said he has no idea about the reason behind it.

"It should not have been lower than last fiscal's collection," he remarked.


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