The board of directors of Rizal Commercial Banking Corp. has accepted the offer of the bank’s president, Lorenzo Tan, to go on leave. The bank has taken center stage during investigations into the $81-million heist of the Bank of Bangladesh. The money was transferred out of the Federal Bank of New York to a branch of RCBC and eventually found its way to various accounts opened under curious circumstances.
According to Tan, his leave would allow him to focus on clearing his name. He has been tagged by the branch manager, Maia Deguito, as being friends with one of the account holders, even asking her to “take care” of the individual, Kam Sin Wong, also known as Kim Wong.
Meanwhile, Deguito and another officer of the bank, Angela Torres, had been terminated by the bank. Deguito is already facing charges for her supposed role in the opening of the spurious accounts.
The Bangko Sentral has vowed it would make the Philippines “inhospitable” to money launderers and those who commit financial fraud. It said it would hold accountable banks that fail in their responsibility. RCBC has apologized to its stakeholders and clients for its involvement in the mess.
Apologies, however, are never enough to restore the banking public’s confidence in a system that has proved full of loopholes. If there is one thing the bank heist shows, it is that all the country’s teeth in preventing the laundering of funds remain on paper. In truth, there are plenty of opportunities for launderers to exploit the system, knowing that the public’s attention span is short and that the people are easily mollified by seeing anybody—even small fry—punished for a large-scale ill.
The next hearing will be on Tuesday, but we doubt whether any real solutions in aid of legislation will be arrived at given the unfortunate timing of the scandal, coinciding with the campaign period. The loopholes in the bank secrecy law and the non-inclusion of casino operations in anti-money laundering regulations have been there a long time, but nobody has raised them until recently. These are bound to remain in oblivion if the people focus on the circus but not on resulting action.
A regulatory system that is inhospitable to money launderers sounds good but is a mere description of a goal rather than a statement about the actual situation. What’s happening is bad for the country’s global image, and even worse for our efforts at genuine reform.