Bank Negara Malaysia (BNM) has imposed administrative monetary penalties on a fintech company and two banks for failing to comply with targeted financial sanctions (TFS) requirements.
BNM said Setel Ventures Sdn Bhd was fined RM637,500 on April 15 after failing to promptly update its sanctions database following the publication of BNM’s Domestic List, which contains individuals and organisations flagged for money laundering or terrorism financing.
The central bank said Setel also failed to screen customers against the updated sanctions database and determine whether potential matches were genuine.
“These breaches were attributed to gaps in Setel’s standard operating procedures and sanctions screening system,” BNM said in a statement.
Setel has since taken corrective measures, including updating its SOPs and improving its internal systems to strengthen compliance with TFS requirements. The company paid the RM637,500 penalty on May 6.
In separate enforcement action, BNM imposed RM132,000 penalties each on Standard Chartered Bank Malaysia and Standard Chartered Saadiq for failing to update their sanctions databases promptly after the Domestic List was issued.
As a result, the banks conducted sanctions screening using outdated databases. However, BNM said neither bank onboarded any specified entities or facilitated transactions involving such entities.
The breaches were linked to gaps in the banks’ sanctions screening controls and shortcomings in ensuring that their screening processes complied with regulatory requirements.
BNM said both banks have since introduced remedial measures to strengthen their controls and improve sanctions screening management, including tighter oversight and faster updates to their screening systems.
Standard Chartered Bank Malaysia and Standard Chartered Saadiq each paid the RM132,000 penalties on June 15.
BNM said the enforcement actions were carried out in accordance with the approach and procedures set out in its published Enforcement Approach.
