Name And Shame Malaysian Way

Bank Negara Malaysia (BNM) will publish enforcement actions taken against financial institutions and intermediaries for non-compliance with rules and regulations. 

BNM Governor Tan Sri Muhammad Ibrahim said on Wednesday the actions would be published effective January 2018 to further increase the impact of enforcement actions as a credible deterrent.  

He said BNM would continue to remain firm in ensuring the orderly conduct of the financial system. 

“We expect financial institutions to adhere to strong compliance and corporate governance standards. We have not hesitated to impose hefty fines when circumstances warranted such actions. 

“Between 2015 to June 2017 a total of RM115.8mil of fines and penalties were imposed on institutions for breaching our regulations and affecting the integrity of the financial system,” he added. 

He said BNM was working in partnership with the industry and other agencies to ensure the integrity of our financial system remains intact. 

“For example, over the last three months, a total of 415 names of individuals who are involved in facilitating financial scams have been shared among financial institutions,” he said at the international conference on financial crimes and terrorism financing 2017.

In his keynote address, “Future proofing compliance: Responsibility and  Response-ability,” he said it was a joint initiative by the Association of Banks in Malaysia and supported by the police and BNM. 

Muhammad said to coordinate and expedite actions against the operators of financial scams, a taskforce led by the Attorney-General’s Chambers has also been established under the National Coordination Committee to Counter Money Laundering. 

“It is worth repeating that public trust and confidence in the financial system cannot be compromised. 

“The cost of financial crimes and terrorism financing are staggering. Based on the United Nations Office on Drugs and Crime (UNODC), money laundering transactions are estimated to cost economies between 2% to 5% of global GDP. 

“This equals to US$1 trillion and US$2 trillion annually. It is a humungous amount. Beyond monetary terms, these activities have destructive consequences for the lives of many, especially the poor and underprivileged,” it said.

However, Muhammad said the authorities must do better to “future-proof” the financial system. 

Three points were:

(a) First, compliance is not the end, it is a means to an end;

(b) Second, compliance should be viewed within a broader context of a financial institution’s responsibilities to society; and

(c) Third, compliance should be approached in partnership with other key participants in the financial system.