BANK Negara Malaysia (BNM) has slapped hefty penalties exceeding RM4.9 million on three major financial institutions for breaches involving customer due diligence, sanctions screening, and credit reporting.
HSBC Bank Malaysia Bhd (HBMY) and HSBC Amanah Malaysia Berhad (HBMS) were fined a combined RM3.26 million for repeated failures to comply with anti-money laundering (AML), counter-terrorism financing, and sanctions screening requirements.
BNM’s on-site reviews found that HSBC did not properly verify beneficial owners of customers and repeatedly failed to conduct timely sanctions screening during customer onboarding, despite earlier remedial efforts.
These lapses, it said, put the financial system at risk of abuse for terrorism and proliferation financing.
“The remedial measures implemented by HSBC were insufficient, resulting in similar breaches which recurred in 2024,” said BNM.
HSBC has since upgraded its systems to block account openings until sanctions screening is completed.
Maybank Islamic Bhd was fined RM1.2 million for submitting inaccurate and late data to the Central Credit Reference Information System (CCRIS), affecting credit records of borrowers.
Accurate CCRIS reporting is crucial to ensure fair credit assessments and prevent wrongful loan denials.
BNM noted the issue “affected the accuracy of credit reports in the CCRIS system.”
Maybank Islamic has implemented measures to prevent recurrence.
Bank Pembangunan Malaysia Bhd received penalties totalling RM493,500 for shortcomings in customer due diligence and sanctions screening, including failure to identify beneficial owners properly and delays in screening customers against updated sanctions lists.
BNM said these lapses were caused by staff’s inadequate understanding and internal control gaps. BPMB has taken steps to strengthen its compliance and employee training.
These enforcement actions reflect BNM’s commitment to ensuring the integrity and resilience of Malaysia’s financial sector.
“The enforcement actions taken are in line with our approach and are aimed at promoting sound risk management practices in the financial sector,” said BNM.
BNM urged all financial institutions to prioritise accurate credit reporting, rigorous customer due diligence, and effective sanctions screening to protect the financial system from abuse and maintain public trust. — TMR
The post BNM imposes over RM4.9m in fines on HSBC, Maybank Islamic, and Bank Pembangunan for regulatory breaches appeared first on The Malaysian Reserve.
