BB installs a more secure SWIFT system after cyber theft

The central bank has installed a new SWIFT system for international transactions from its foreign currency reserves as it is determined to ensure foolproof security, Bangladesh Bank Governor Fazle Kabir said yesterday.

“The SWIFT system is being re-established in a new format through which we will be able to ensure water-tight security in future,” he said, adding that the system is not awaiting a third-party inspection.

Ever since the $101 million cyber theft in early February, the central bank has undertaken a detailed remedial plan on the basis of recommendations from the BB's IT adviser and Belgium-based SWIFT.

A number of measures will be taken under the remedial plan. One of them is when the system will be restored a third party audit will be conducted.

The governor said the auditors were neither involved in the installation of the new system nor representatives of the central bank or the SWIFT.

“After carrying out the audit, if they say the system is okay it will be introduced,” Kabir told reporters at his office.

Kabir was appointed the BB governor after his predecessor Atiur Rahman was forced to resign over the cyber theft of its reserve with the Federal Reserve Bank of New York. 

Now, the payment instructions for the NY Fed are sent through a three-tier process alongside the normal SWIFT system that entails e-mails.

“If the NY Fed feels the e-mail is not sufficient to carry out the payment instruction, they will call us back through telephone,” he said.

The payment will be made only after communication through three channels.   On the repatriation of the stolen reserve money that ended up in the Philippines, the BB chief said the central bank firmly believes that the whole amount could be brought back.

Six hearings were held in the country's Senate on the issue. 

During the hearings a Filipino businessman confessed that he possessed $15.25 million of the stolen money. The money is now lying as a deposit with the Philippines Anti-Money Laundering Council (AMLC).

The amount could be brought back after the completion of the due process in the court of the Philippines, Kabir said, adding that the Bangladesh side has already completed the legal process.

The governor also said the AMLC and the Philippines central bank have provided much help in returning the stolen funds to Bangladesh.

Some portion of the $81 million that entered the Filipino banking system through the cyber theft has been with the casinos in the Southeast Asian country, he said. The AMLC has forfeiture case against the stolen amount and money will be repatriated.

Julia Bacay-Abad, executive director of AMLC, said last week that a lower court in Manila already granted its petition for the civil forfeiture filed in May, reported the Philippine Star.

She said the forfeiture order covers the funds amounting to about $15 million turned over by casino junket operator Kim Wong to the AMLC in April and May.

During one of the hearings at the Senate, Abad said the AMLC is still looking for around $21 million as it already accounted for about $60 million.

These included the $15 million turned over by Wong, the $28 million with Solaire Casino and the $17 million allegedly with Philrem Services Corp.

Kabir also said the Philippines central bank has conducted an investigation into the Rizal Commercial Banking Corporation (RCBC) through which the stolen money was transferred.

The BB governor said he had talks with the Filipino counterpart last week, who informed him that the process is at the last stage.

“If RCBC can be held liable successfully, we will get back the whole amount of the money,” Kabir added. At home, the Criminal Investigation Depart-ment of the police is conducting an investigation into the hacking. A government probe committee has also completed an investigation and submitted its report.

Besides, US cyber security firm FireEye has also conducted an investigation and submitted its findings to the government.