Proposed law to make financial institutions accountable for negligence

KUALA LUMPUR, 4 Mac -- Timbalan Menteri di Jabatan Perdana Menteri (Undang-Undang Dan Reformasi Institusi) M. Kulasegaran ketika sesi soal jawab Waktu Pertanyaan-Pertanyaan Menteri sempena Sidang Dewan Rakyat di Bangunan Parlimen hari ini. -- fotoBERNAMA (2024) HAK CIPTA TERPELIHARA

FINANCIAL institutions could be held accountable for negligence under a proposed law which would also allow for a “kill switch” to beef up digital security and combat online fraud, says M. Kulasegaran.

The Deputy Minister in the Prime Minister’s Department (Law and Institutional Reforms) said the proposed law will include measures that are to be taken against financial institutions found to be negligent.

“I believe financial institutions must be responsible, they cannot avoid their responsibilities,” he said.

He was responding to a supplementary question by Khoo Poay Tiong (PH-Kota Melaka) on whether the Bill would allow action against financial institutions that were negligent.

Kulasegaran said the government is in the process of drafting the new Act which will involve provisions and procedures as well as enforcement of a kill switch to step up digital security and safety in line with the development of artificial intelligence and rise of cybercrime.

He added that the government is also studying existing laws such as the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, Penal Code and Criminal Procedure Code to see how the law could be used to return money to scam victims.

Meanwhile, he said a total of RM3.2bil was lost to online scams between 2020 and 2023.

He told the Dewan Rakyat yesterday that these involved 107,716 cases, adding that “comprehensive action” is being taken by the government to tackle the issue.

Kulasegaran said measures include setting up the National Scam Response Centre (NSRC) in October 2022 and the 997 hotline.

He added that there had been collaborative efforts to curb scam activities.

These efforts, he said, involved the police, Bank Negara, the Malaysian Communications and Multimedia Commission, National Anti-Financial Crime Centre, financial institutions and telecommunications companies.

“The NSRC through the MCMC has identified phone numbers used for fraudulent activities with the help of telecommunications companies,” he said.

He said as of January, a total of 131 phone numbers had been blocked due to fraudulent activities while 93 others were deactivated for suspicious activities.

He was responding to a question from Dr Siti Mastura Muhammad (PN-Kepala Batas) on the losses reported due to scams from 2020 to last year and about the measures taken by the government to combat scams.

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