Bangladesh central bank chief resigns

Bangladesh’s central bank governor Atiur Rahman resigned yesterday following demands of accountability from the government after $81mn was stolen from the bank’s US account in one of the largest cyber heists ever.
Rahman, who returned to Dhaka late on Monday after attending a weekend International Monetary Fund conference in New Delhi, said that Prime Minister Sheikh Hasina had accepted his resignation.
The government also fired two deputy governors of the bank, Finance Minister Abul Maal Abdul Muhith said, days after blaming it for keeping the government in the dark about the theft.
Rahman, 65, 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,”
Rahman said.
A former finance secretary, Fazle Kabir, would be the new governor, the finance minister said.
Unknown hackers breached the computer systems of Bangladesh Bank and attempted to steal $951mn from its account at the Federal Reserve Bank of New York, which it uses for international settlements, between February 4 and February 5.
They managed to transfer $81mn to entities in the Philippines, and the money was
further diverted to casinos there.
More than $30mn of the money that was stolen was handed over in cash to an ethnic Chinese man in Manila, a Philippines senator looking into the suspected laundering scheme said.
Bangladesh Bank officials have said there is little hope of apprehending the perpetrators and recovering the money would be difficult and could take months.
Rahman’s exit could be a blow to Bangladesh, a South Asian nation of 160mn. The country has been aspiring to reach middle-income status, and Rahman was seen as one of the driving forces helping Dhaka towards that goal.
A former development economics professor, Rahman took over as the central bank governor in May 2009, and was nearing the end of his second term.
One of his signature achievements has been shoring up the country’s foreign exchange reserves, which have increased four-fold to $28bn under his watch.
He also tried to ensure farmers and women entrepreneurs had better access to banking services and credit.
“He has set a good example by taking the responsibility for this incident,” said Wahid Uddin Mahmud, a professor of
economics at Dhaka University.
The pressure to remove Rahman built up over the weekend, after Muhith publicly expressed his annoyance that he learned about the heist only a month
after the fact from the media.
The central bank had not informed him about the theft at the time, he said.
On Monday, the minister raised the issue at a cabinet meeting, where Hasina said that the central bank should be held responsible for the loss, an official who was the meeting said.
Rahman defended his record at the central bank, saying he was proud of his achievements there. He described the heist as an “earthquake” and said the bank had promptly informed intelligence agencies in Bangladesh and abroad and also brought in international experts to
investigate.
FireEye Inc’s Mandiant forensics division is helping investigate the cyber heist. The bank has also been in touch with the Fed and other US authorities, including the FBI and the
Department of Justice.
“After doing all these measures and getting a clear picture, we informed the finance minister in writing,” Rahman said.