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Bangladesh central bank chief forced to resign over $81-M heist

01:17 AM March 16, 2016

DHAKA—Bangladesh’s central bank chief has resigned after hackers stole $81 million from the nation’s foreign reserves in one of the biggest bank heists in history, the finance minister announced on Tuesday.

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The audacious cybertheft has embarrassed the Bangladesh government, triggered outrage in the impoverished country and raised alarm over the security of the country’s foreign exchange reserves of over $27 billion.

On Tuesday, the finance minister said he had asked Atiur Rahman to resign following revelations that the governor of Bangladesh Bank—the country’s central bank—had failed to inform authorities of the theft for a month.

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“He called me Tuesday and I’ve asked him to resign. And he has resigned today,” Finance Minister A.M.A. Muhith told Agence France-Presse (AFP), adding that the government has ordered an investigation of the heist.

On Feb. 5, hackers stole $81 million from a current account that Bangladesh Bank held with the Federal Reserve Bank of New York and transferred the cash electronically to accounts in the Philippines.

The hackers attempted to steal almost $1 billion, but they were prevented from taking more because of a basic typing error, the Bangladesh Bank’s deputy governor told AFP last week.

Before his resignation, an emotional Rahman said he was alarmed by the hack, but he did not comment on why he took so long to report the missing money.

“This event was almost like a militant attack, almost like an earthquake. I did not realize how it happened, from where it originated and who had done it,” he said, choking back tears.

“When I was informed I was so puzzled. Fearing that it might destroy our economy, I quickly took opinion of the experts. I brought them to the country from abroad and ensured security so that it did not occur again,” he added.

Due to retire

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Rahman, a 64-year-old economist and former university professor, was appointed governor of Bangladesh Bank in 2009 and had been due to retire in August.

As details of the scandal emerged last week, he flew to India to attend an International Monetary Fund meeting, leaving junior officials scrambling to explain how the hackers managed to take such large sums from Bangladesh Bank.

Some of the funds have been recovered and Philippine authorities have frozen the stolen money following court orders. Bangladesh Bank suspects the hackers were Chinese.

The thieves, who bombarded the New York bank with dozens of transfer requests, attempted to steal a further $850 million, but the bank’s security systems and typing errors in some requests prevented the full theft.

The hack took place on a Friday, when Bangladesh Bank is closed, while the Federal Reserve Bank in New York is closed on Saturday and Sunday.

The US reserve bank, which manages the Bangladesh Bank reserve account, has denied its own systems were breached.

The $81 million was transferred to four accounts at Rizal Commercial Banking Corp. (RCBC) in the Philippines—and were then transferred to fictitious bank account.

The money was then transferred to Philippine casinos, Julia Bacay-Abad of the Philippine Anti-Money Laundering Council told a Senate hearing on Tuesday.

The RCBC account has been frozen.

Mystified by attack

Rahman launched a series of populist policies to take bank services to the doorstep of millions of rural poor in Bangladesh.

But his tenure was marred by a spate of high-profile banking scams in which state-owned banks lost hundreds of millions of dollars in bad loans.

On Tuesday, Rahman said authorities were still mystified by the attack as he defended his decision to delay informing the government.

He added that making the news public earlier would have risked tipping off the hackers.

“I don’t deny that I took time [to inform the finance minister]. It was a cyberattack and even today we don’t know from where it originated,” he said. AFP

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TAGS: Atiur Rahman, Bangladesh, Features, Global Nation, money laundering, RCBC
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