Bank Negara 'has power to enforce compliance'

KUALA LUMPUR • Malaysia's central bank yesterday clarified that it had the power to enforce compliance, saying it can take action against those found to have not complied with the regulatory laws administered by the bank.

In its statement, Bank Negara Malaysia said it was empowered to take enforcement action, also known as administrative action, on parties that are found to have transgressed or have not complied with rules and regulations issued under the Financial Services Act, Bernama news agency reported.

"These actions may be taken concurrently with, and are separate and distinct from, criminal proceedings that are under the sole purview of the Attorney-General," it said. Such actions would include "the imposition of monetary penalties, issuance of an order to comply, making restitution to any person aggrieved by a breach, public and private reprimands and an order to take steps to mitigate or remedy a breach", it added.

"This is to ensure the integrity of, and confidence in, the financial system."

The statement comes a week after Attorney-General Mohamed Apandi Ali defended his decision to close the bank's investigation into the troubled 1Malaysia Development Berhad (1MDB), saying there was no evidence that the state fund's officials had knowingly flouted the law.

The central bank had also urged the Attorney-General to prosecute 1MDB, saying it had secured permits to remit US$1.83 billion (S$2.5 billion) overseas based on inaccurate or incomplete disclosure of information, breaching domestic regulations.

Tan Sri Apandi had dismissed the bank's request, saying it had not tried to stop 1MDB's overseas transactions, and that 1MDB could not be faulted for failing to disclose information when the central bank did not request it in the past.

Mr Apandi has come under pressure from critics over his decision not to bring the state investor to court and to charge its critics instead. 1MDB has been at the centre of a political crisis over its debt of nearly RM42 billion (S$13.7 billion) and alleged financial graft.

A version of this article appeared in the print edition of The Straits Times on October 20, 2015, with the headline 'Bank Negara 'has power to enforce compliance''. Print Edition | Subscribe