KAF Investment Bank has been fined RM1.03 million by Bank Negara Malaysia for breaching foreign exchange rules.
The penalty was imposed on 6 January 2026 under the Financial Services Act 2013 after the bank failed to comply with directions requiring proper internal controls to ensure adherence to the central bank’s Foreign Exchange Policy Notices.
BNM said the bank processed transactions involving foreign currency assets for a resident individual with Domestic Ringgit Borrowing above the permitted limit without sighting the required approval from the central bank.
This amounts to a breach under section 214(9) of the Act.
Under current rules, resident individuals with Domestic Ringgit Borrowing can invest up to RM1 million per calendar year in foreign currency assets funded through the conversion of ringgit.
Any amount above that limit requires prior written approval from the central bank before a financial institution can proceed with the transaction.
In setting the compound amount, the central bank considered the absence of adequate compliance controls, the bank’s past record, and the remedial steps taken after the breach was identified.
Bank Negara Malaysia said KAF Investment Bank has since strengthened its internal policies and procedures to address the gaps.
The bank paid the compound in full on 29 January 2026.
The regulator added that the action was taken in line with its enforcement framework and reminded financial institutions to ensure strict compliance with foreign exchange requirements, including obtaining approvals where required.
Featured image: Edited by Fintech News Malaysia, based on image by somemeans via Freepik
