Warns of law suits and hefty fines.
Bank Negara Malaysia, the central bank, said it may take erring banks and financial institution to court for civil proceedings to force compliance or remedial actions, and impose large fines on offenders under the new financial law that came into force last week.
The central bank also took on added powers under the Financial Services Act 2013 and the Islamic Financial Services Act 2013. It also assumes a larger role to identify early potential risks and warnings to the financial system.
Both new laws replace the Banking and Financial Institutions Act 1989, the Islamic Banking Act 1983, the Insurance Act 1996, the Takaful Act 1984, the Payment System Act 2003 and the Exchange Control Act 1953.
Analysts said the FSA is an omnibus legislation that covers not one sector but several sectors, in this case banks, insurance companies payment systems providers, broking business and financial advisors.
They noted that under the new FSA, BNM may institute civil proceedings to seek a court order to impose monetary penalty; an injunction, an order to comply or perform a certain act and an order to mitigate the effect of breach, including restitution.
Civil proceedings can be commenced regardless of the fact that criminal proceedings have been instituted against a person in respect of the contravention or breach.
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