Bangladesh central banker quits over $111m theft

Mr Rahman was asked to step down after revealing to the Finance Minister that he had failed to inform the authorities of the theft for a month. Two of the bank's deputy governors were also sacked.
Mr Rahman was asked to step down after revealing to the Finance Minister that he had failed to inform the authorities of the theft for a month. Two of the bank's deputy governors were also sacked.PHOTO: BLOOMBERG

Loss of foreign reserves to hackers embarrasses govt, sparks outrage and alarm in country

DHAKA • The chief of Bangladesh's central bank has resigned after hackers stole US$81 million (S$111 million) from the nation's foreign reserves in an audacious cyber-theft that has embarrassed the government, triggered outrage in the country and raised alarm over the security of its foreign exchange reserves of over US$27 billion.

Finance Minister A.M.A. Muhith said yesterday that Bangladesh Bank governor Atiur Rahman had stood down on his request, after revealing that he (the governor) had failed to inform the authorities of the theft for a month.

"He called me yesterday and I've asked him to resign. And he has resigned today," said Mr Muhith, adding that the government has ordered a probe into the heist.

Two of the bank's deputy governors were also sacked after the government vowed a major shake up of the institution's top management, Mr Muhith told reporters. Former finance secretary Fazle Kabir would be the new governor, he said.

On Feb 5, the hackers stole US$81 million from an account that Bangladesh held with the Federal Reserve Bank of New York and transferred the cash electronically to accounts in the Philippines. They attempted to steal almost US$1 billion and were prevented from taking more only because of a typing error, the Bangladesh Bank's deputy governor said last week.

Mr Rahman said he resigned to set an example in a country where there is not much precedence of accountability and to uphold the image of the central bank. "I took responsibility," he said.

Before his resignation, an emotional Mr Rahman said yesterday that he was alarmed by the hack, but 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 realise 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."

Mr Rahman, 65, an economist and former university professor, was appointed governor of Bangladesh Bank in 2009 and had been due to retire in August.

He said the 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 cyber attack and even today we don't know from where it originated."

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 steal so much.

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, denied its own systems were breached.

Some of the funds have been recovered, and Manila has frozen the stolen money following court orders, Bangladesh Bank said. It suspects the hackers were Chinese.

AGENCE FRANCE-PRESSE, REUTERS

A version of this article appeared in the print edition of The Straits Times on March 16, 2016, with the headline 'Bangladesh central banker quits over $111m theft'. Print Edition | Subscribe