Banks can suspend accounts suspected of criminal activity, says Finance Minister

PETALING JAYA: Banks have the right to temporarily suspend any account if there is suspicion of criminal activity or fraudulent transactions, says Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.

Zafrul said that Bank Negara has guidelines and best practices to help banks carry out customer due diligence, effective customer risk profiling, identifying the existence of financial fraud through red flags and to understand the latest financial crime approaches and trends.

He added that based on the terms and conditions that have been agreed upon during the opening of an account, the bank can impose restrictions on any customer or account that it suspects is being misused or being involved in criminal activity.

“If the transactions in a bank account give rise to suspicion, the bank can impose temporary restrictions on the account to enable a thorough assessment while ensuring that the money from fraudulent or criminal activities will not be withdrawn from the account,” he said.

“This is conducted based on the analysis by the bank,” Zafrul added when replying to a question raised by Datuk Seri Abdul Azeez Abdul Rahim (BN - Baling) in Dewan Rakyat on Thursday (March 3).

Abdul Azeez had asked about the bank’s authority in closing a customer’s bank account based on the fact that there are suspicious transactions in the customer’s account without conducting investigation or inquiries on the account holders.

Zafrul said among the forms of restrictions that can be imposed by the bank are such as blocking Internet banking facilities, debit cards, automatic teller machines apart from closing the bank accounts after the bank is satisfied with their assessment.

He said the bank may decide to continue a transaction or business dealings with the account holder, or decide not to proceed with the transaction or close the customer's account after implementing steps and assessing the appropriate risk.

Zafrul however also said that this is subject to the restrictions issued by the authorities.

“The step of closing the account is only taken after a thorough assessment has been made, and a reasonable notice period has been given to the customer,” said Zafrul.

“In short, the termination of the relationship between the bank and the customer is not a legal requirement. It is a business call by a banking or financial institution based on their internal risk assessment,” he added.