RCBC comes under fire over $81-M transaction

RIZAL Commercial Banking Corp. (RCBC) came under fire at the Senate yesterday after it said it could only have slowed down but not stop the transactions involving the $81 million—later found to have been stolen from the Bangladesh central bank—that were deposited in dormant accounts  its Jupiter Street branch.

Maria Celia Estavillo, head of the bank’s legal and regulatory affairs group, said RCBC did not have the right to retain the funds without a freeze order from the court.

What it could do was file a suspicious transactions report,  Estavillo said.

“Under the law, we have not been given any right to retain the funds,” she said at the resumption of the Senate probe into the alleged laundering of the $81 million.

But this was unacceptable to Sen. Sergio Osmeña III, chair of the committee on banks, who later twitted RCBC for stopping the transfers when only $68,000 of the stolen money was left and the bulk had been withdrawn.

“You’re telling the whole world, ‘send your money to the Philippines because we cannot stop [the transactions].’ It will go straight to the casino or to the remittance company,’” Osmeña said.

Osmeña also questioned why the bank’s president, Lorenzo Tan, was not alerted on the entry of the $81 million until it was learned that the funds may have been stolen from Bangladesh, and most of the money had left the bank.

He said that if he were the bank and a party asked him for a stop payment on the account involving that party’s stolen money, he would be obligated to comply.

“I may not give the money back until he proves it’s his, but definitely I would stop payment,” he said.

He also said if there was no proof of a legal transaction—such as payment for services—to explain the amount, the bank would have to ask questions.

Estavillo said she understood Osmeña’s logic, “but unfortunately, the laws do not reflect the rights that you are explaining.”

She said what the bank could do was to “slow down on the processing and make the parties speak.”

Pressed by Osmeña to say whether the bank would allow the transactions to go through or not, she said, “Effectively, it would have the same effect.”

“It would not have the same effect and you’re not being very candid with the committee,” Osmeña said.

Estavillo countered that she was being “very candid.”

The law simply does not allow banks to just stop transactions, she said, adding that it might be good to amend it to give more teeth to the banks. “Even the regulators do not have that authority,” she said.

Osmeña said he had spoken with several top bankers who said they would exercise their discretion and stop the transaction.

Estavillo said that was not RCBC’s reading of the law, and all banks have the same obligations and rights.