The Bangladeshi Banking Blunder

Atiur Rahman, the governor of Bangladesh’s central bank, stepped down Tuesday after over $100 million was stolen from the bank’s account at the New York Fed last month. Approximately 80% of the stolen amount was transferred to personal accounts in the Philippines, while the rest made its way to a bank in Sri Lanka. Official codes were used to facilitate the theft, and a representative from Bangladesh’s ministry of finance confirmed that the currently unknown criminals had the necessary codes to authorize the transfers. The American Fed has been accused of irregular activity, while questions were raised about the quality of security on the Asian country’s end.

The breach initially started in February with the transfer request of $1 billion. The transfer requests were filled with full authentication, which implies a certain level of security clearance, and were meant to be transferred to private accounts in Sri Lanka and the Philippines. The requests appear as though they originated from Bangladesh’s central bank centers in the nation’s capital, Dhaka.

Due in part to a lack of oversight by the Bangladeshi Finance Ministry, it took less than a weekend for the official transfer requests to be completed and the $100 million was already lost. Further transfers were blocked after alarms were raised of the transfers being made to personal accounts. The wire transfer to Sri Lanka went to the account of an NGO. Charges are being filed by a Filipino laundering oversight council and the involvement of Filipino officials is being brought into question. The New York Fed has declined to put out any official comments on the issue.