Malaysia fines two banks for non-compliance with AML/ CFT requirements

BPMB reportedly did not properly screen existing customers for risk.

The Bank Negara Malaysia (BNM) is fining Bank Pembangunan Malaysia Berhad (BPMB), and HSBC Malaysia for non-compliance with requirements on anti-money laundering (AML) and countering financing of terrorism (CFT), amongst others.

BNM imposed a total administrative monetary penalty of $116,000 (MYR 493,500) on BPMB for non-compliances in relation to customer due diligence (CDD) and sanctions screening requirements.

Of this, $54,000 (MYR229,500) was due to BPMB’s non-compliance with the Development Financial Institutions Act of 2002 (DFIA), which requires banks to identify and take ‘reasonable’ measures to identify the identities of their customers.

This allows the banks to assess their exposure to money launder/terrorism financing risks and take appropriate mitigation measures, the central bank said.

BPMB was separately fined $62,000 (MYR 264,000) for non-compliances with the DFIA, wherein the bank failed to conduct sanctions screening its existing customers for possible AML and CFT risk.

Reporting institutions, including banks like BPMB, must screen their entire customer database to identify any positive name matches immediately after the relevant authorities publish the respective lists.

HSBC Malaysia was also fined $76,000 (MYR324,000) for non-compliances to AML and CFT rules.

(US$1 = MYR4.24; as of 30 May 2025, Google from Morningstar)

In particular the bank failed to take ‘reasonable’ measures to verify the identities of the beneficial owners (BOs) of the customers for assessing exposures to money laundering and terrorism financing risks.