BSP lifts sanctions on RCBC

By: - Reporter / @daxinq
/ 05:26 AM September 21, 2018

Two years after imposing the heaviest set of penalties ever on a local financial institution, the bank regulators this week lifted punitive sanctions on Rizal Commercial Banking Corp. after it was determined to have “complied substantially” with measures designed to prevent a repeat of the $81-million Bangladesh Bank cyberheist.

The Inquirer learned that the sanctions were ordered lifted by the Bangko Sentral ng Pilipinas on Tuesday after the Yuchengco family-controlled bank submitted a letter of commitment to the Monetary Board detailing the steps it would take to resolve “residual issues.”


“It can now move forward with expansion plans, and its profitability will almost surely improve,” a ranking central bank official said, requesting anonymity because of the confidential nature of the decision.

The probationary status, called Prompt Corrective Action (PCA) in local banking parlance, imposed tough restrictions on RCBC in August 2016, including a P1-billion penalty which was the biggest in Philippine history.


Among the sanctions imposed was the requirement to clear major transactions with the BSP personnel detailed to look over the shoulders of bank officials, thus preventing many transactions from being approved.

The central bank official said RCBC had complied with regulators’ requirements to revamp its antimoney laundering processes and tighten internal controls with an emphasis on enhanced know-your-customer rules.

This was prompted by the 2016 incident where $1 billion was stolen by hackers from the New York accounts of the Bangladeshi central bank, $81 million of which was successfully wired to RCBC and deposited under bank accounts in the name of fictitious persons, before promptly disappearing in the previously loosely regulated Philippine casino industry.

“The Monetary Board is satisfied with the progress RCBC has made,” the official said. “They even engaged a third party from abroad to review their systems and suggest areas of improvement.”

RCBC has also previously executed a top management revamp, replacing all of its department heads as well as hiring a new president and CEO. The bank also instituted a reorganization of its board of directors, increasing the number of independent directors on its 15-man board from three to seven, just one person shy of a majority.

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TAGS: $81-million Bangladesh Bank cyberheist, Bangko Sentral ng Pilipinas, Rizal Commercial Banking Corp.
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