KUALA LUMPUR – Bank Negara Malaysia (BNM) has imposed an RM660,000 administrative monetary penalty (AMP) on Bank Pertanian Malaysia Bhd (Agrobank), after finding gaps within the bank’s internal policies and procedures that potentially expose it to terrorism financing, among others.
BNM said the AMP was imposed on September 3 after Agrobank was found to not be compliant with subsection 41(4) of the Development Financial Institutions Act 2002.
The provision is read together with other provisions of the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document.
Under the policy document, reporting institutions are required to conduct sanctions screening on existing, potential or new customers against the Domestic List and United Nations Security Council Resolutions List as part of due diligence processes.
Reporting institutions are also required to screen their entire customer databases for any positive name match upon publication of the respective lists by the relevant authorities without delay.
BNM said it had identified a breach during an on-site examination, which revealed gaps in Agrobank’s internal policies and procedures as well as its implementation, leading to failure to conduct timely sanctions screening on its customers and beneficial owners.
“While no sanctioned entities were onboarded and no transactions of sanctioned entities were facilitated, the identified gaps exposed the bank to significant risks of being abused for terrorism financing and proliferation financing,” it said in a statement today.
Agrobank paid the penalty in full on September 13. It has also taken remedial measures to revise its internal policies and improve its internal screening system to ensure prompt sanctions screening, the central bank added.
“BNM will continue to monitor and supervise Agrobank’s compliance with and effectiveness in implementing sanctions screening-related requirements.” – October 1, 2024
