Bangladesh Central Bank Chief Quits Over $101 Million Heist | Independent Newspapers Limited
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Bangladesh Central Bank Chief Quits Over $101 Million Heist

Posted: Mar 16, 2016 at 9:18 am   /   by   /   comments (1)


Bangladesh central bank governor Atiur Rahman has submitted his resignation as tensions escalate with the finance minister after hackers stole about $101 million from the nation’s foreign reserves.

Rahman submitted his resignation on Tuesday to Prime Minister Sheikh Hasina, according to A.F.M. Asaduzzaman, a spokesman at Bangladesh Bank. Finance Minister Abul Maal Abdul Muhith, who called the central bank’s handling of the theft “very incompetent,” said a former bureaucrat would likely take his place.

“If it’s my fault, they can take action against me, against Bangladesh Bank,” Rahman told Bloomberg on Tuesday before meeting with the prime minister. “But they cannot insult me in public.”

The cyberheist has rattled authorities from Bangladesh to Sri Lanka to the Philippines as central banks around the globe awaken to the threat posed by hackers. The Bank of England faces “advanced, persistent” cyber threats, according to a letter by the U.K. central bank made public after a Freedom of Information request by Bloomberg.

Philippine Connection

The Bangladesh theft is also making headlines in the Philippines, where much of the stolen money ended up. On Tuesday, a bank manager accused of allowing the funds to be withdrawn invoked her right against self-incrimination as lawmakers questioned her over the crime.

Bangladesh’s central bank said it recovered $20 million of the stolen funds, and $81 million is outstanding. Attempts by hackers to withdraw another $850 million were foiled in part because they misspelled the name of one of the recipients.

Rahman told reporters that he wasn’t a “technical guy” and was “puzzled” by the theft. He was due to retire in August, when he turns 65, after helming the central bank for seven years. Ihsanul Karim, the prime minister’s press secretary, didn’t answer several calls to his mobile phone.

Fazle Kabir, a career bureaucrat, is likely to be appointed as Bangladesh’s next central bank governor, Muhith told reporters on Tuesday. Kabir spent 34 years working for Bangladesh’s government, including a stint as Finance Secretary, and is currently chairman of state-owned Sonali Bank Ltd.

‘Quite Shocking’

Bangladesh could’ve done more to monitor its accounts and detect suspicious activity faster, according to security experts including Andrey Dulkin of Jerusalem-based CyberArk. The country should be “very concerned” about the risk of copy-cat attacks, said Victor Keong, a partner at consultant Deloitte Touche Tohmatsu Ltd. in Singapore.

“It is quite shocking,” Keong said. “If a central bank can have such lapses — and it is the regulator — then those it regulates might not be so well protected.”

Born to a poor family, Rahman had briefly quit school due to a lack of money before graduating from Dhaka University. He wrote a doctoral thesis titled “Peasants and Classes” at the School of Oriental and African Studies in London. He was named Central Bank Governor of the Year for Asia 2015 by the Emerging Markets newspaper, following India’s Raghuram Rajan and China’s Zhou Xiaochuan.

“We have embarked on an era of new central banking which has got a distinct developmental focus,” Rahman told Bloomberg News last year. “That focus is inclusivity and environmental sustainability, which was never reflected in any monetary policy anywhere in the world.”