March 15, 2016 / 12:25 PM / 3 years ago

UPDATE 3-Bangladesh central bank governor resigns over cyber heist

* Hackers stole $81 million from central bank’s U.S. account

* Central bank governor accepts responsibility

* Government unhappy over handing of theft (Adds new governor, para 6)

By Serajul Quadir

DHAKA, March 15 (Reuters) - Bangladesh’s central bank governor Atiur Rahman resigned on Tuesday following demands of accountability from the government after $81 million was stolen from the bank’s U.S. 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, told Reuters 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 $951 million from its account at the Federal Reserve Bank of New York, which it uses for international settlements, between Feb. 4 and Feb. 5.

They managed to transfer $81 million to entities in the Philippines, and the money was further diverted to casinos there.

More than $30 million 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 160 million. 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 $28 billion 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.

CONTROVERSY AT HOME

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 U.S. 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. (Additional reporting by Ruma Paul; Writing by Paritosh Bansal and Sanjeev Miglani; Editing by Raju Gopalakrishnan)

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