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Banks (Finance)

Bank Negara Malaysia Imposes Administrative Monetary Penalty on HSBC Bank Malaysia Berhad

Strategic Insights

— 1 min read

Bank Negara Malaysia (BNM) has issued an administrative monetary penalty (AMP) of RM3,264,000 to HSBC Bank Malaysia Berhad (HBMY) for non-compliance with customer due diligence (CDD) and sanctions screening requirements. The penalty is in addition to a separate AMP of RM3,264,000 imposed on HSBC Amanah Malaysia Berhad (HBMS) for non-compliance with sanctions screening requirements.

The penalty on HBMY was imposed on 13 March 2025, and is a result of a non-compliance with paragraph 48(1)(a) of the Financial Services Act 2013 (FSA), read together with paragraphs 14A.1(h), 14A.3(c) and 14A.9.6 of the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT and TFS for FIs 2019 PD). The AML/CFT and TFS for FIs 2019 PD requires reporting institutions (RIs) to identify and verify the identities of natural persons who are beneficial owners (BOs) of customers, in order to assess exposure to money laundering/terrorism financing risks and take appropriate mitigation measures.

Key Takeaways:

  • HSBC Bank Malaysia Berhad (HBMY) received an Administrative Monetary Penalty (AMP) of RM3,264,000 for non-compliance with customer due diligence (CDD) and sanctions screening requirements, and HSBC Amanah Malaysia Berhad (HBMS) for non-compliance with sanctions screening requirements.
  • The penalty on HBMY was imposed on 13 March 2025, for a lack of understanding regarding the requirements for BOs as outlined in the AML/CFT and TFS for FIs 2019 PD.
  • HBMY had taken remedial measures, including strengthening its compliance monitoring processes and providing refresher training programmes to improve staff's understanding of BO requirements.
  • The BNM considered aggravating and mitigating factors, including HBMY's past compliance record and history of formal actions imposed, and HBMY's remedial actions taken to rectify the gaps.

Statistics:

  • AMP imposed on HBMY: RM3,264,000
  • AMP imposed on HBMS: RM324,000
  • Total AMP imposed on HSBC: RM3,588,000

Sources:

  • [1] Paragraph 48(1)(a) of the Financial Services Act 2013 (FSA), read together with paragraphs 14A.1(h), 14A.3(c) and 14A.9.6 of the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT and TFS for FIs 2019 PD)
  • [2] Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT and TFS for FIs 2019 PD)

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