Bank Negara Malaysia (BNM) has imposed a compound of RM1.025 million on KAF Investment Bank Berhad (KAF IB) for failing to comply with regulatory requirements under the Financial Services Act 2013 (FSA).
In a statement, the central bank said the compound, imposed on Jan 6, 2026, stemmed from KAF IB’s failure to comply with directions issued under Section 214(6) of the FSA. The provision requires financial institutions to establish and implement internal controls and procedures to ensure adherence to BNM’s Foreign Exchange Policy (FEP) Notices.
BNM said KAF IB failed to sight the central bank’s approvals before effecting transactions involving foreign currency assets by a resident individual with Domestic Ringgit Borrowing (DRB) exceeding the permissible limit, constituting a breach under Section 214(9) of the FSA.
In determining the penalty amount, BNM said it took into account several aggravating and mitigating factors, including the absence of adequate internal controls and procedures to ensure compliance with the FEP Notices.
The central bank also considered KAF IB’s past compliance record, as well as its post-misconduct conduct and the effectiveness of remedial actions taken to prevent recurrence.
Following the discovery of the offence, KAF IB implemented corrective measures, including putting in place and enforcing internal policies and procedures to strengthen compliance with FEP requirements.
The bank paid the full compound amount of RM1.025 million on Jan 29, 2026.
BNM said the enforcement action was consistent with the approach and processes outlined in its published Enforcement Approach document.
The central bank emphasised that financial institutions and members of the public must ensure full compliance with applicable FEP requirements when undertaking foreign exchange transactions, including obtaining prior written approval from BNM where necessary.
Financial institutions were also reminded to properly guide and advise customers on these regulatory obligations.
