Policing financial institutions

TODAY is Elvis Presley’s 84th birth anniversary. We miss him.

On Aug. 16, 2007, I was quietly commemorating Elvis’ 30th death anniversary. Unbeknownst to me at the time, P50,000 was illicitly withdrawn from my BDO telebanking account. It was only a few days later when I did a balance enquiry that I realized that funds were missing.

We had not received any notification from the bank that a suspicious transaction had taken place. It was suspicious because although the maximum daily withdrawal limit was P20,000, the amount withdrawn was P50,000. Furthermore, to gain access to the account should require knowledge of my personal identity number (PIN). No one knew that number but me who divulged it to not a soul. In fact the illicit transaction was carried out from an internal BDO terminal number 6654 at 10.30 hours.

I could not obtain a satisfactory answer from BDO as to why the faulty transaction happened. Much later I contacted Bangko Sentral ng Pilipinas (BSP) which received the standard reply from BDO Legal which says in effect: “Sorry Sir, the Bank Secrecy Act (RA 1405, passed in 1955) forbids us to tell you anything.” Since mine was the only account involved and since I made it clear that I had no secrecy concerns, I find this reply disappointing.


The relationship between BSP and the banks is not an ascendant (BSP) and subordinate (the banks) as many think it is or should be. For several years our ATM cards were skimmed and money stolen from our accounts. If banks were convinced that we had done nothing wrong, then stolen money was eventually refunded.

From mid 2012, BSP issued “instructions” that our easily skimmed cards should be replaced by cards with an EMV chip which seemingly could not be skimmed. These instructions were first issued with a January 2013 implementation date. Some banks complied with BSP but many others did not. The date at which the non-skimmable cards should be issued by banks slipped by a year every year until June 2018. In other words, many banks did not take BSP instructions seriously.


Next month sees the third anniversary of the Bangladesh Bank “cyberheist” in which $81 million was stolen from Rizal Commercial Banking Corporation (RCBC)’s Jupiter Street Branch. By coincidence, the third anniversary in the international calendar is almost exactly the same as the third lunar new year anniversary. Gung Hei Fat Choy!

RCBC accused its Jupiter Street Branch Manager, Maia Deguito, of misconduct and fired her. Was this accusation appropriate or was she scapegoated?

Former RCBC CEO Lorenzo Tan accused Ms. Deguito of libel and perjury and sought P32 million in damages. What happened to this case? Is this yet another example of an important person accusing an unimportant one of libel but not following through?

Mike Arroyo, then First Gentleman, did this to several journalists in 2009 but then “forgave” them. This is a good reason to decriminalize libel as the threat of libel action is simply designed to bully the defendant.

The RCBC case “ended” unsatisfactorily. Of the stolen $81 million, $15 million was returned by Kim Wong who arranged
“junkets” for high rolling gamblers. It was stated that the remaining $66 million was laundered through casinos. This begs the question of where eventually did the $66 million go. RCBC was fined P1 billion by BSP but $66 million is well over P3 billion!

The robbery was a success.

Those responsible for policing our monetary system failed.

We must do better./PN


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