Bank Negara Malaysia (BNM) has imposed financial penalties and fines amounting to almost RM 5 million on four lending institutions for breaches of financial services regulations. The announcement was made on Wednesday, confirming that the fines were settled by the institutions between March and April of this year.

HSBC Bank Malaysia Berhad and its Islamic subsidiary, HSBC Amanah Malaysia Berhad, collectively incurred a penalty of RM 3.26 million. Maybank Islamic Berhad, a unit of Malayan Banking Berhad, was fined RM 1.2 million. Bank Pembangunan Malaysia Berhad received a penalty of RM 493,500.

The central bank identified weaknesses in how HSBC and Bank Pembangunan Malaysia conduct customer due diligence. BNM noted that these issues and fines were particularly apparent in their methods for identifying beneficial ownership. An on-site examination of HSBC revealed a “lack of understanding” of these requirements.

HSBC also identified internal lapses in its sanctions screening processes during a review in 2023, attributing these to staff oversight and system limitations. Similarly, Bank Pembangunan’s non-compliance stemmed from an inadequate understanding of beneficial ownership requirements and gaps in its sanctions screening.

Maybank Islamic’s penalty relates to inaccuracies in submitting information to the Central Credit Reference Information System (CCRIS). The bank failed to correctly report information for three customers, which subsequently impacted their credit records.

BNM emphasised the critical importance of financial institutions’ accurate CCRIS reporting to ensure fair credit assessments for borrowers.

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