RCBC faces possible penalties for not stopping $81M of transactions

Rizal Commercial Banking Corp. (RCBC) is facing possible financial and administrative penalties for its alleged involvement in the $81-million money laundering scheme, an official of the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

"There are several things applicable here, in BSP’s charter our penalties are limited to P30,000 maximum per day," said BSP Deputy Governor Nestor Espenilla Jr. at the Senate blue ribbon committee hearing on Tuesday.

"That is assessed on a case by case basis depending on the circumstances of the situation," the central bank official clarified.

He noted there are also administrative sanctions that, in this case, may be applicable to RCBC.

"In addition to monetary penalties, the BSP, through the Monetary Board, can also impose what we call non-monetary sanctions which are basically disciplinary actions against persons responsible and also on the bank.

"Beyond that, under the anti-money laundering law, there are provisions that may be application with respect to monetary penalties," Espanilla added.

Senator Ralph Recto called for an amendment to the law, saying the fine is too small compared to the millions of dollars imposed against similar cases in the United States.

"I think it is the right of Congress and Senate to consider increasing penalties. This is because the economy has grown, transactions have grown," said Espenilla.

It was established during the hearing that RCBC received on February 9 stop payment requests and freeze order from the Bangladesh Bank to halt the transactions involving the stolen funds.

But RCBC did not act immediately since the requests, which were sent through the Society for Worldwide Interbank Financial Telecommunication (SWIFT), were vague and not urgent, said RCBC Legal and Regulatory Affairs Group head Maria Celia Fernandez-Estavillo.

Only a court order would have compelled the bank to freeze the accounts, the lawyer emphasized.

"Perhaps the law (Anti-Money Laundering Act) should be amended to include holding power so these banks have holding power in such (SWIFT) messages," Estavillo noted.

Maia Santos-Deguito, the former manager of RCBC Jupiter branch in which the stolen money was initially stored, pushed through with the withdrawal of the funds despite the stop payment requests, Estavillo noted.

The funds were later on remitted by PhilRem Service Corp. to casinos and junket operators. – VDS, GMA News