Banks’ remittance units face tighter scrutiny

 

De Ocampo, who chairs Philippine Veterans Bank and sits on the Bankers Association of the Philippines board, thus appealed to the Senate blue ribbon committee to hold subsequent hearings on the Rizal Commercial Banking Corp. (RCBC) issue behind closed doors.  He argued that holding the hearings outside of public spectacle might be able to yield even more information and thus be “more productive.”

“Thus, this investigation in aid of legislation could result in a positive outcome, such as the strengthening of our AMLA (Anti-Money Laundering Act) to include casinos, and the preservation of the globally recognized reputation of our banking system,” he said.

 

De Ocampo said the money laundering issue hounding the country at present started outside the Philippines and it now appeared to be limited to one branch of one bank.

“Unfortunately for us, it has become a global spectacle. Unfortunate because as the investigation—aired live on television—drags on, unintended consequences are starting to emerge and be felt across the board. If we continue on this path, the gains we have had in the past will be at risk: our credit rating, foreign investments, economic growth, and our international banking and financial operations,” he said.

“This early, Philippine banks’ remittance operations abroad experience tighter scrutiny from their partner foreign banks. That is bad news to our roughly 12 million OFWs. And that is only one example of problems we may be creating for ourselves over an isolated situation.”

De Ocampo said while he understood the need to investigate, he cited the need for sobriety and circumspection “lest we unwittingly put national interest at risk.”

“With this in mind, if we must continue to dig deeper, we must spare our institutions and our nation,” he said.

The former finance chief said the Philippine banking system was strong and local bankers were deemed among the best in the region.

“I strongly believe both our banking system and RCBC will be able to weather this storm and emerge even stronger with lessons learned from it,” he said.

In the meantime, a number of Philippine banks clarified that the recent closure of their overseas remittance operations—such as in Italy—were not related to the money laundering issue concerning $81 million in dirty money stolen from the central bank of Bangladesh.

In the case of RCBC, the bank’s group head for global transaction banking said the bank had closed its remittance operations in Italy “because it could not meet on time the computer systems capabilities required of it by Banca D’Italia since 2014.”

An OFW group earlier noted the closing of Bank of the Philippine Islands’ (BPI) remittance operations in Italy. Sources in the bank, however, said this was not related to the laundering issue.

In a statement, BPI said its European unit, BPI Europe Plc, would close its Milan and Rome branches in Italy on June 1 in line with its strategy to strengthen its presence in London.

The closure had been officially communicated to the Prudential Regulation Authority on Feb. 24 and designed to complement a plan submitted to the UK regulatory body in 2014.

“Upon completion of its Italian branch closure activities, BPI will focus on the banking operations of its Threadneedle and Earl Court’s offices in the United Kingdom,” BPI said.

“BPI Europe Italian branch clients have been formally informed of the closure and requested to get in touch with our Italy branches on or before May 1, 2016, for the disposition of their deposit accounts. BPI will assist clients to make withdrawal transactions, transfer their funds to another Italian bank account, or remit them to their Philippine beneficiary,” it said.