Friday, April 8, 2016

Indian banking on alert after $81 million stolen from Bangladesh's central bank



NEW DELHI: India's national security establishment has sounded the alarm over the recent theft of $81 million from Bangladesh's central bank citing the possibility of involvement of Pakistan's intelligence agency, the Inter-Services Intelligence.

A high-level government official has communicated the security establishment's concerns to the Reserve Bank of India (RBI), urging the central bank to be cautious. In February, unidentified hackers infiltrated the computer systems of Bangladesh Bank, the country's central bank, and succeeded in transferring $81 million to casinos based in Philippines, in what has been termed as one of the largest cyber heists in history.

"There are inputs that some of the places where money was transferred, or was attempted to be transferred, had some linkages with ISI," said a senior government official privy to the communication between India's security establishment and RBI.

"There can be similar attempts on the Indian banking system and that is why the advisory was issued," the official noted.

In response to a detailed email from ET, the RBI spokesperson said the central bank was taking precautions. "We have been analysing the fraud involving operations of Bangladesh Bank with Federal Reserve Bank and are taking suitable precautions both at RBI and in the banking system."

An email sent to the office of the National Security Adviser did not elicit any response at the time of filing the report.

Reports say the hackers tried to siphon off as much as $951 million from the bank's foreign currency reserve account with the Federal Reserve Bank of New York.

Alarm bells went off after a failed attempt to transfer $20 million to a bank account in Sri Lanka. According to reports, the transaction was blocked because the hackers misspelled the name of a Sri Lankan non-profit organisation — Shalika Foundation, the intended recipient.

That is when the Federal Reserve Bank of New York halted transactions worth $850 million. However, $81 million has not yet been accounted for.

After the incident came to light, the governor of Bangladesh Bank Atiur Rahman resigned earlier this month and two deputy governors were fired.

"Obviously, we do not want a similar situation in India," said the official quoted earlier.

The Philippine Senate is conducting televised hearings on the theft and the role of Manila-based Rizal Commercial Banking Corporation in the episode. The bank has admitted that $81 million was deposited in its Jupiter branch in Makati City.

According to a report filed by Philippines' Anti-Money Laundering Council, the president and general manager of casino operator Eastern Hawaii Leisure Co, Kim Wong, received 1 billion pesos ($29.5 million) from Rizal Bank through local remittance company Philrem Service Corp.

News agency Reuters on March 29 reported that Wong had deposed before the Philippine Senate denying involvement in the episode, but named two Chinese individuals from Beijing and Macau who, he said, "brought in" the $81 million.

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