KUALA LUMPUR: Bank Negara Malaysia (BNM) has imposed a compound of RM1.02 million on KAF Investment Bank Bhd (KAF IB) for non-compliance with directions issued under the Financial Services Act 2013 (FSA).
The central bank said the compound arose from KAF IB’s failure to comply with directions issued under section 214(6) of the FSA requiring financial institutions to have in place and implement internal controls and procedures to ensure compliance with BNM’s Foreign Exchange Policy (FEP) Notices.
"KAF IB failed to sight BNM’s approvals before giving effect to transactions involving foreign currency assets by a resident individual with Domestic Ringgit Borrowing (DRB) exceeding the permissible limit, which is a breach under section 214(9) of the FSA,” BNM said in a statement.
BNM said that in deciding the compound amount, it had considered relevant aggravating and mitigating factors, including KAF IB’s absence of controls and procedures to ensure compliance with the Foreign Exchange Administration (FEA) Notices and its past compliance record.
It also took into account the bank’s post-misconduct behaviour as well as the effectiveness of the remedial actions taken by KAF IB to prevent the recurrence of non-compliances.
"Upon discovery of the offence, KAF IB took remedial measures to put in place and implement internal policies and procedures to ensure compliance with FEP requirements,” it said.
The central bank added that KAF IB paid the total compound amount of RM1.025 million on Jan 29, 2026, adding that the enforcement action taken was in line with the approach and processes outlined in its published Enforcement Approach document.
BNM emphasised that financial institutions and members of the public must ensure full compliance with relevant FEP requirements when undertaking foreign exchange transactions, including obtaining prior written approval from the central bank where required, and reminded financial institutions to appropriately guide and advise customers on these requirements. - Bernama
