Bank Negara Malaysia (BNM) has fined KAF Investment Bank Bhd RM1.025 million for breaching foreign exchange policy (FEP) rules under the Financial Services Act 2013 (FSA).
The penalty arose after KAF IB failed to obtain BNM’s approval for foreign currency transactions involving a resident individual whose domestic ringgit borrowing exceeded the allowed limit, violating Section 214(9) of the FSA. The breach also reflected inadequate internal controls to ensure compliance with FEP Notices, as required under Section 214(6) of the FSA.
KAF IB has since implemented remedial measures, including new internal policies and procedures to strengthen compliance. The bank paid the compound on Jan 29, 2026.
BNM said it considered both aggravating and mitigating factors, such as the bank’s prior compliance record and corrective actions, before determining the compound. The central bank reiterated that financial institutions must fully comply with FEP requirements, including obtaining written approval for certain foreign exchange transactions, to avoid enforcement actions.
