RCBC at center of cyber heist appeals New York court loss to Bangladesh

January 21, 2023 - 10:40 AM
A security guard stands outside a branch of Rizal Commercial Banking Corporation in Paranaque City. (Reuters file)

A Philippine bank at the center of an unsolved $81 million cyber heist has appealed a New York Supreme Court decision to dismiss the bank’s motion to throw out the Bangladesh central bank’s lawsuit against it.

In February 2016, unidentified hackers used fraudulent orders on the SWIFT payments system to steal $81 million from Bangladesh Bank’s account at the Federal Reserve Bank of New York. The money was sent to accounts at Rizal Commercial Banking Corp (RCBC) RCB.PS and then vanished into the casino industry in the Philippines.

Bangladesh Bank has accused RCBC and several others, including top executives, of conspiring to steal its money. The Manila-based Rizal bank denies the allegations.

The New York Supreme Court ruled on Jan. 13 that, contrary to Rizal bank’s argument, it does have jurisdiction over the case, and dismissed Rizal bank’s motion against Bangladesh Bank.

In the same ruling, the court ordered the Bangladesh central bank and RCRC to initiate mediation.

In response to the ruling, Rizal bank said it would continue to fight the case.

“The decision and order merely resolved the jurisidictional issues and is not in any way a finding of liability on the part of RCBC, or any of the individual defendants,” it said in a stock exchange disclosure.

Bangladesh Bank has welcomed the court ruling, saying in a statement this week that it clears the way for the matter to progress in court in New York as needed.

A banking sector source in Dhaka, who declined to be named as he was not authorized to speak to the media, said that according to the Bangladesh central bank, RCBC should now come forward for mediation or prepare for a long court battle.

—Reporting by Karen Lema in Manila and Krishna N. Das in New Delhi; Additional reporting by Neil Jerome MoralesEditing by Kanupriya Kapoor