Bank Negara seeks feedback on remittance service

KUALA LUMPUR: Bank Negara Malaysia (BNM) is seeking feedback from remittance service providers on the  proposed minimum rules in implementing the electronic Know Your Customer (e-KYC).

BNM has issued an exposure draft that outlines the proposed minimum requirements and standards under the e-KYC for carrying on remittance business through online or mobile channels for the on-boarding process. 

“This is to ensure effective and robust Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) control measures and systems that safeguard the safety and integrity for the provision of online and mobile remittance services are in place,” it said.

BNM is inviting written feedback and comments on the exposure draft. It said respondents had to support each comment with a clear rationale and accompanying evidence or illustration, as appropriate.

Responses must be submitted by Oct 20, 2017.

According to the draft prospectus, the reporting institution shall obtain BNM's prior written approval to implement e-KYC for the provision of online or mobile remittance services. 

BNM also said the bBoard of a reporting institution shall set and ensure the effective implementation of appropriate policies and procedures to address any specific risks associated with the implementation of e-KYC. 

“This shall include, where relevant, the implementation of enhanced monitoring and reporting mechanisms to identify potential money laundering and terrorism financing (ML/TF) activities,” according to the draft prospectus. 

A reporting institution must ensure and be able to demonstrate on a continuing basis that appropriate measures for identification and verification of a customer’s identity are at least as effective as that for face-to-face customer verifications. 

BNM also said a reporting institution shall take measures including, but not limited to the following, to identify and verify a customer’s identity: 

(a) establish independent contact with the customer; 

(b) verify a customer’s information against independent and credible sources to confirm a customer’s identity and identify any known or suspected AML/CFT risks associated with a customer; 

(c) request additional documents to complement those which are required for face-to-face customer verifications; and 

(d) clearly define parameters for higher risk customers that are not allowed to transact with the reporting institution through e-KYC.

BNM said for remittance transactions performed by an individual who is a foreign worker,

(i) a total transaction limit not exceeding RM5,000 per month shall be observed, unless otherwise approved by BNM; and

(ii) funds can only be remitted to the individual’s home country; and beneficiaries who must be pre-registered by the individual with the reporting institution when the business relationship is established.

The reporting institution must put in place robust and appropriate IT security controls, including tying up a customer’s remittance account to only one mobile device.