Bank Negara Malaysia imposes MYR 3.264m penalty on HSBC Malaysia entities for beneficial owner due diligence and sanctions screening breaches

Bank Negara Malaysia imposed Administrative Monetary Penalties totalling MYR 3,264,000 on HSBC Bank Malaysia Berhad and HSBC Amanah Malaysia Berhad for non-compliance with the Financial Services Act 2013, Islamic Financial Services Act 2013 and AML/CFT and targeted financial sanctions requirements, focused on customer due diligence for beneficial owners and sanctions screening at onboarding. On 13 March 2025, HSBC Bank Malaysia Berhad was fined MYR 324,000 for customer due diligence failings on identifying and verifying beneficial owners, which Bank Negara Malaysia identified during an on-site examination and linked to a lack of understanding of beneficial owner requirements; remedial steps included strengthened compliance monitoring and refresher training. Bank Negara Malaysia also imposed MYR 2,940,000 on HSBC Bank Malaysia Berhad and HSBC Amanah Malaysia Berhad for sanctions screening breaches under the AML/CFT and TFS for Financial Institutions 2019 Policy Document and the AML/CFT/CPF and TFS for Financial Institutions 2024 Policy Document, after reviews found customers onboarded without proper screening against the Domestic List and United Nations Security Council Resolutions List due to staff oversight, ineffective maker-checker controls and inadequate system capabilities, with similar breaches recurring in 2024 despite earlier remediation; the banks subsequently enhanced systems to prevent account opening until screening is completed, and Bank Negara Malaysia noted no specified entities were onboarded or transacted. The total penalty was paid on 24 March 2025.