KUALA LUMPUR (Jan 28): Bank Negara Malaysia (BNM) imposed over RM2.5 million in penalties in 2024 on financial institutions and money service providers for breaches including customer due diligence failures, foreign exchange policy violations and inadequate data reporting.

In separate statements, BNM said Worldwide Superstar Money Changer Sdn Bhd (WSMC) was fined RM51,000 on Aug 28 last year for failing to comply with customer due diligence (CDD) requirements and proper installation of CCTV cameras at its premises.

The company deliberately split transactions below RM3,000 to avoid conducting CDD and failed to install CCTV cameras in areas where business funds were stored.

On July 11, 2024, BNM imposed RM1.66 million in penalties on four financial institutions for late, incomplete and inaccurate submissions of critical data under the Financial Services Act 2013 (FSA) and Islamic Financial Services Act 2013 (IFSA).

The affected institutions were Malayan Banking Bhd (KL:MAYBANK) (RM750,000), RHB Bank Bhd (KL:RHB) (RM750,000), Maybank Islamic Berhad (RM150,000) and AmInvestment Bank Berhad (RM10,000), a unit of AMMB Holdings Bhd (KL:AMBANK).

These errors were attributed to unresolved IT issues, inadequate procedures and incorrect application of statistical requirements, BNM's statement read.

On Nov 18, AmBank (M) Bhd was penalised RM875,000 for breaching the Foreign Exchange Policy by facilitating unauthorised investments in foreign currency assets without obtaining BNM approval. The breach highlighted gaps in AmBank's internal compliance controls, BNM said.

In the statement, the central bank highlighted the importance of compliance with regulatory requirements, particularly in areas such as customer due diligence, foreign exchange policy adherence and accurate data reporting, as part of efforts to safeguard monetary and financial stability.

BNM's enforcement actions are guided by its "Enforcement Approach" document, which outlines the central bank's objectives to encourage a strong culture of compliance, protect stakeholders' legitimate interests and strengthen market discipline through the disclosure of enforcement actions.

The document details the enforcement process, including detection of breaches, assessment, decision-making by the Enforcement Committee, communication of decisions, appeal procedures and publication of enforcement actions.

In determining appropriate enforcement actions, BNM considers factors such as the nature and seriousness of the breach, the effectiveness of existing control measures, the institution's past compliance record and remedial actions taken post-breach.