Stern action expected of central bank

THE recent discovery of an organised crime syndicate linked to the disappearance of RM24.2mil from several bank accounts has called to attention the need to enhance banking systems in order to detect and prevent such crimes from happening.

It appears that the banks are being outsmarted by crime syndicates, which effectively means that the safeguards in place at present to prevent such financial crimes are not adequate.

Banks, whose motives are centred around maximising profit and shareholder value, would view risk and compliance mechanisms as cost centres. For any commercial enterprise, that must be expected.

This is where Bank Negara Malaysia, as the country’s financial regulator, must impose itself adequately and appropriately.

To begin with, Bank Negara should conduct a full-scale inquiry and then declare to the public the shortcomings of the safeguards within the financial services industry in the country.

The safeguards must be able to not just keep up with organised crime syndicates but also stay ahead of them.

As part of its inquiry, Bank Negara should examine whether banks have an adequate number of staff with the appropriate level of training to manage the risks that their system is exposed to.

The central bank should also investigate whether the services that have been outsourced or offshored could have created more risks for the sector.

Bank Negara should play its role as a regulator to serve the good of the Malaysian public and economy as a whole.

CALLISTUS ANTONY D’ANGELUS

International Labour Advisor,

Social Protection Contributors Advisory Association Malaysia (SPCAAM)