At the resumption Tuesday of the Senate Blue Ribbon committee inquiry into the heist, Osmeña grilled Estavillo on the bank's role in the transaction of stolen funds from the account of the Bangladesh Bank.
Estavillo said that under the bank secrecy law, RCBC has to protect the rights of its clients and therefore could not speak about the deposits.
However, Osmeña argued that the owners of the accounts are fictitious, which means there is no client to protect.
“We understand that RCBC has already found out that those five accounts don’t exist—these persons don’t exist. So therefore, there is nobody to protect,” the senator said.
Estavillo said the bank would still need a court order determining that the accounts are indeed fictitious. She said the bank is unable to discuss specific deposits because all deposits are confidential under the bank secrecy law.
“The law gives the bank an absolute obligation unless there are exceptions, apart from the knowing voluntary and written consent of the depositor, banks may actually be required to divulge information in certain instances like impeachment, bribery, dereliction of duty of public officials, there are specific cases,” she said.
Estavillo added that the bank did not have the power to freeze the million-dollar deposits nor did it need to raise the matter to the bank's top officials.
"If we have ample notice, the only rights that are given to us would be to file an [STR] suspicious transaction report...we can only hold it for a period. Under the law, we have not been given any right to retain the funds," she said.
To which Osmeña responded, "I’m afraid many bankers will disagree with you."
The senator said he has talked to several bankers and the consensus he received was that "they would exercise discretion and stop [the transaction]."
Estavillo said, however, that the law applies to all banks and “that’s why it would be good to amend the laws to give more teeth to the banks because even the regulators do not have that authority."
"I wish that it would be the case because it would make our jobs easier," she said.
'IT AND HUMAN FAILURE'
RCBC president and chief executive (on leave) Lorenzo Tan, meanwhile, believes the anomalous transaction pushed through due to both human and computer failure.
He said the bank's threshold of suspicious transactions is at P1 billion (about $20 million), but it still depends on the "instincts" of bank employees in determining what transactions to report.
“Thresholds can only give you protection at a certain point because people will find out what your threshold is and they will remit below that,” Tan told the senators at the hearing.
“What will really catch dirty money is having intelligent systems in your bank, like what you have in global banks today. Even if you have modern software, you still need instincts to kick in—your compliance people, your operations people, your sales people, they all have to use their judgment,” he added.
Tan again apologized that its staff have been linked to the scandal, but said it "can happen again" unless stricter measures and a more advanced computer system are put in place.
“We have the IT controls and the human controls, and unfortunately, it failed in the end in the execution,” Tan said.
"This experience, we have made changes to our present system to prevent this from happening again. If you ask my opinion, it can happen again. Philippine banks have to upgrade to cognitive systems. We have to look at our employee behavior, what time do they go in and what time they go out, what they do outside.
We have to look at transaction behavior. Only computers can do that. If you have a bank and envision 20-40 million customers times x number of transactions per second, there is no way you can have human intervention along the way."
The bank earlier issued an apology to the public after its employees were linked to the $81-million money laundering heist.
It added that it is conducting its own inquiry to identify and address any weaknesses in its controls and operations, and it will take appropriate actions against any bank officer or staff found guilty of negligence.
source: www.abs-cbnnews.com
