NY Fed, Bangladesh central bank to resume normal money transfers: sources
- Wall Street rises, buoyed by economic data; Dow sets high
- Twitter (TWTR) 'Takeover Money' Moves On as 'Trump Money' Moves In
- Amazon (AMZN) Could Open Over 2,000 Brick-and Mortar Groceries if Tests Succeed - DJ; Kroger (KR) on Watch
- Buy Any Seasonal Market Weakness Ahead of Year End Rally - Oppenheimer (SPY)
- After-Hours Stock Movers 12/05: (TXMD) (COUP) (BOBE) Higher; (SB) (LXRX) (STWD) Lower (more...)
Commuters pass by the front of the Bangladesh central bank building in Dhaka March 8, 2016. REUTERS/Ashikur Rahman/File Photo
News and research before you hear about it on CNBC and others. Claim your 2-week free trial to StreetInsider Premium here.
By Krishna N. Das and Serajul Quadir
(Reuters) - The Federal Reserve Bank of New York and Bangladesh's central bank have agreed to withdraw additional payment security measures put in place after one of the world's biggest cyber heists, the theft of $81 million from Bangladesh Bank's account at the Fed, two sources said.
The decision comes after SWIFT, the global financial messaging platform, promised in May to strengthen security on software tools used by its clients and to develop new tools that would spot a compromised account and raise a red flag when a payment instruction deviates from normal patterns.
The decision was taken at a meeting in New York this week between officials from Bangladesh Bank, the New York Fed and SWIFT, said a source close to Bangladesh Bank who has direct knowledge of the matter. They have agreed on a tentative timeline to withdraw the additional security measures but the source declined to give details.
"(The New York Fed and Bangladesh Bank) want to use (only) SWIFT for secure communication," said the source, declining to be named as he was not authorized to brief the media. "We are talking about normalizing our communication channels as soon as possible."
The New York Fed declined to comment. SWIFT could not be immediately reached.
In early February, hackers used stolen Bangladesh Bank credentials to send three dozen SWIFT messages to transfer nearly $1 billion from its Fed account, eventually managing to route $81 million to a bank in the Philippines. Most of the money was laundered through casinos in Manila and remains missing.
Following the heist Bangladesh Bank initiated a new protocol under which the Fed could only clear any SWIFT request from Dhaka after a voice authentication. Fed officials had to call one of two or three Bangladesh Bank officials whose voice samples were shared with the Fed.
A senior Bangladesh Bank official in Dhaka, who declined to be named, said more time was needed "to improve the system" before moving back to a SWIFT-only transfer mechanism.
Both sources said the New York Fed wanted to do away with the additional measure as it delayed genuine transfer instructions. SWIFT has told Bangladesh Bank its system was secure and that the Asian bank needed to tighten its own defenses to prevent criminals from hacking into their computer systems.
Bangladesh Bank spokesman Subhankar Saha said he was not aware of the agreement and would comment only after the bank's delegation came back from the United States.
The three parties that met in New York this week said in a statement on Wednesday that officials discussed "certain technical details" of the heist to enhance their understanding of how the fraud occurred, as well as "steps that have been and will be taken to remediate the event."
The Bangladeshi delegation also requested the New York Fed put more pressure on the Philippines' Rizal Commercial Banking Corp (RCBC) to recover the rest of the stolen money, said the source close to Bangladesh Bank. The funds were routed to four accounts at that bank before they disappeared into casinos in the city.
Since the heist, the New York Fed has launched a 24-hour hotline for emergency messages from its banking clients.
In June, it also wrote to the Philippines' central bank, prodding it to help Bangladesh Bank retrieve the lost money. Bangladesh Bank officials believe the nudge from the Fed was one of the reasons the Philippines central bank this month slapped a record fine of 1 billion pesos ($21 million) on RCBC in connection with the heist.
(Additional reporting by Jonathan Spicer in New York; Editing by Raju Gopalakrishnan and David Gregorio)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- U.S. military to return some land in Okinawa by year end
- Web giants to cooperate on removal of extremist content
- Threat called in against Los Angeles Red Line commuter rail system: officials
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!