Bank Negara Malaysia (BNM) imposed a compound of RM1,025,000 on KAF Investment Bank Berhad (KAF IB) for failing to comply with BNM directions requiring financial institutions to have and implement internal controls and procedures to ensure compliance with BNM’s Foreign Exchange Policy (FEP) Notices. The breach related to KAF IB’s failure to sight BNM approvals before giving effect to 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 Financial Services Act 2013. BNM noted it considered aggravating and mitigating factors including the absence of controls and procedures, KAF IB’s past compliance record, and post-misconduct behaviour and remedial actions; KAF IB subsequently implemented remedial measures and paid the compound on 29 January 2026. BNM also reiterated that resident individuals with DRB may invest in foreign currency assets up to RM1 million per calendar year (from ringgit conversion) and that investments above this limit require financial institutions to sight BNM’s approvals before processing the transactions.
Bank Negara Malaysia 2026-02-25
Bank Negara Malaysia imposes RM1.025 million compound on KAF Investment Bank for foreign exchange policy compliance failures
Bank Negara Malaysia imposed a RM1,025,000 penalty on KAF Investment Bank Berhad for non-compliance with internal controls and procedures under the Foreign Exchange Policy Notices. The breach involved transactions exceeding permissible limits for resident individuals with Domestic Ringgit Borrowing without prior BNM approval. KAF IB has since implemented remedial measures and paid the penalty.