MANILA: The Philippine Central Bank on Friday fined a local bank a record US$21 million after it was used by hackers to channel millions of dollars stolen from Bangladesh into local casinos.
Unidentified cyber criminals in February shifted $81 million from an account held by the Bangladesh central bank with the US Federal Reserve to a Manila branch of Rizal Commercial Banking Corp (RCBC), From there the money was laundered through local casinos.
The central bank said in a statement that it had approved the record fine of one billion pesos ($21 million) fine after a "special examination" of the bank and its role in the audacious cyber heist.
The move shows the central bank's "strong commitment to ensure the stability of the country's financial system through strong and effective regulation", it added.
John Gomes, the Bangladeshi ambassador to Manila, said he welcomed the "positive" development.
RCBC said separately that it had made provisions for the fine and would pay it in two instalments over a one-year period.
The total was equivalent to more than 38% of the 2.6 billion pesos it earned in net profits during the first half of 2016.
But it added: "The payment of the amount will not affect the operations of RCBC, and capital ratios will continue to be strong."
The brazen cyber heist highlighted how the Philippines' banking loopholes and anti-money laundering laws have made the impoverished and corruption-weary country a dirty money destination.
Philippine law exempts casino transactions from scrutiny by the Anti-Money Laundering Council without a case filed in court.
Filipino authorities now say they have tracked down all but $21 million of the loot, but have recovered only a fraction of it.
The Council has filed a suit to gain control of the alleged stolen funds from RCBC, the casinos, and a Manila-based Chinese casino operator.
But the process is expected to take years, with Bangladesh voicing frustration at the slow pace of the return of surrendered funds.
Gomes said Dhaka would send a high-level delegation to Manila late next month to press for the return of the funds.
The Bangladesh theft was one of a series of spectacular cyber attacks against banks this year that have heightened fears the industry is becoming an increasingly attractive target for hackers.