On 20 November 2025, Bank Negara Malaysia (BNM) imposed an Administrative Monetary Penalty (AMP)^[1] of RM460,000 on Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank) for failure to promptly submit suspicious transaction reports (STR).^[2]

As a reporting institution (RI), SME Bank is required to promptly submit an STR to BNM.^[3] This mitigates the risk of RIs from being used as channels for money laundering and terrorism financing (ML/TF), and other serious crime activities. Additionally, the STR submitted provides BNM and other law enforcement agencies with valuable information and/or intelligence on potential criminal activities to support financial crime investigations.

BNM discovered that SME Bank failed to promptly submit on suspicious activities conducted by several customers. This breach was due to inadequate staff awareness on STR-related requirements.

SME Bank has taken remedial measures by enhancing its internal AML/CFT policies and enhancing training for relevant staff on AML/CFT requirements.

In deciding the AMP to be imposed, relevant aggravating and mitigating factors were considered. This includes the severity of the breach and SME Bank’s:

1. lack of reasonable care in ensuring compliance with the STR-related requirement;
2. current controls to ensure compliance with the requirements; and
3. past compliance record.

On 3 December 2025, SME Bank paid RM460,000 for the AMP imposed by BNM.

BNM requires all RIs to maintain a high level of commitment in ensuring compliance with AML/CFT requirements. BNM will not hesitate to take appropriate supervisory and enforcement actions should any RI fail to meet legal and/or regulatory requirements.

The enforcement action taken against SME Bank is in line with the approach and processes outlined in the published Enforcement Approach.

^[1 BNM imposed the AMP pursuant to section 106A(3)(b)(i) of the Development Financial Institutions Act 2002 (DFIA).

^[2 This requirement is set out under section 41(4)(a) of the DFIA, read together with paragraph 22.1.1 of the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT and TFS for FIs PD).

Note: The AML/CFT and TFS for FIs PD was in effect from 1 January 2020 to 5 February 2024 and has since been superseded by the Anti-Money Laundering, Countering Financing of Terrorism, Countering Proliferation Financing and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT/CPF and TFS for FIs PD), which took effect on 6 February 2024. This requirement is preserved under paragraph 22.1.1 of the AML/CFT/CPF and TFS for FIs PD.

^[3] Under paragraph 22.1.1 of the AML/CFT and TFS for FIs PD, RIs are required to promptly submit STR to BNM whenever the RI suspects or has reasonable grounds to suspect that the transaction, regardless of the amount:

1. appears unusual;
2. has no clear economic purpose;
3. appears illegal;
4. involves proceeds from an unlawful activity or instrumentalities of an offence; or
5. indicates that the customer is involved in ML/TF.