• Remember - if it sounds too good to be true, it's probably not true;
• Beware of Ponzi schemes. They are fraudulent investment schemes where the operators will take money from new investors to pay earlier or existing investors. Eventually it will reach a critical stage when there are not enough new investors to support this and subsequently the whole scheme collapses;
• Deal only with licensed financial institutions and authorised dealers;
• Check with the relevant authorities before investing/ depositing; 
• Don't be pressured or rushed to invest;
• Be extra careful with investments over the internet;
• Be sceptical of any investment opportunity that is not in writing;
• In case an investment has been made, keep copies of all the investment  documentation; and
• Refer to the following  financial fraud alert websites:
  • http://www.bnm.gov.my/microsites/fraudalert/index.htm
  • http://www.sc.com.my/sub.asp?pageid=&menuid=233

• FAQs related to Resident Individuals
• FAQs related to Resident Companies
• FAQs related to Foreign Currency Trading by Resident Individuals and Companies
• FAQs related to Non-Resident Individuals and Companies

I. FAQs related to Resident Individuals

A. Buy and sell foreign currency
1. Can a resident individual buy or sell foreign currency from or to any non-resident?


B. General payments
2. Can a resident individual pay another resident in foreign currency?
3. What type of foreign currency receipts from abroad can a resident individual keep in a foreign currency account?
4. Can a resident individual use own foreign currency funds to pay the licensed onshore banks for the purchase of foreign currency financial products?
5. Is there any restriction for the settlement of trade in goods and services between a resident individual and non-residents?


C. Investment in foreign currency assets

6. Can a resident individual purchase shares in a company outside Malaysia?
7. Does a resident individual need to seek permission to invest in approved foreign currency products offered onshore?
8. Does a resident individual require prior permission to purchase a house overseas?


D. Borrowings

9. Does a resident individual need to seek permission to repay a loan obtained from a non-resident?
10. Can a resident individual swap his/her outstanding foreign currency debt obligation into another foreign currency debt obligation?
11. Can a resident individual swap his/her outstanding ringgit debt obligation into a foreign currency debt obligation?
12. Can a resident individual lend in foreign currency to his/her immediate family members overseas?


E. Guarantees
13. Can a resident individual issue a personal guarantee to an overseas bank to guarantee a loan obtained by his/her non-resident relatives from the bank?
14. Can a resident individual make a payment arising from a guarantee to a non-resident?


F. Others
15. Can a resident individual remits funds to pay for their children’s education overseas?
16. Does a resident individual need prior permission to open a foreign currency account?
17. I am a resident with a child studying abroad. Can my child and I open a joint bank account with an overseas bank?
18. How much ringgit can a resident individual convert to credit into a foreign currency account for education/employment overseas?
19. Where can I seek more information on foreign exchange administration rules in Malaysia?
20. How can I apply for permission to undertake transactions which require approval?

A. Buy and sell foreign currency


1. Can a resident individual buy or sell foreign currency from or to any non-resident?
    

   No. Residents may only buy and sell -
   • foreign currency with licensed onshore banks; or
   • foreign currency notes with licensed money changers.

    

B. General payments

2. Can a resident individual pay another resident in foreign currency?
   • A resident individual is allowed to pay another resident in foreign currency for the following purposes:
     • settlement of approved foreign currency financial products offered by licensed onshore banks or any institutions approved by Bank Negara Malaysia;
     • settlement of commodity murabahah transactions through resident commodity trading service providers;
     • for education and employment overseas; and
     • for any purpose by a resident individual to another resident immediate family member (comprises parents and children, husband and wife as well as siblings).
   • Prior permission from the Controller of Foreign Exchange is required for payment between residents in foreign currency for purposes other than the above.
   
    
3. What type of foreign currency receipts from abroad can a resident individual keep in a foreign currency account?
   
   A resident individual may keep foreign currency receipts arising from income, profit, rental, proceeds from divestment of foreign currency assets and permitted foreign currency borrowings in his foreign currency accounts maintained onshore and offshore.
    
4. Can a resident individual use own foreign currency funds to pay the licensed onshore banks for the purchase of foreign currency financial products?
   
   Yes



5. Is there any restriction for the settlement of trade in goods and services between a resident individual and non-residents?
   
   A resident individual is allowed to settle in ringgit or foreign currency for the purchase of goods and services with non-residents, provided that payment in ringgit by the resident to the non-resident or vice-versa must be made into/from an External Account of the non-resident or a non-resident financial institution.
   
    
C. Investment in foreign currency assets


6. Can a resident individual purchase shares in a company outside Malaysia?
   
   Yes, subject to the prevailing rules on investment in foreign currency assets.
    
7. Does a resident individual need to seek permission to invest in approved foreign currency products offered onshore?
   
   No. Such investment will however, be subject to the prevailing rules on investment in foreign currency assets.
    
8. Does a resident individual require prior permission to purchase a house overseas?
   
   The purchase of properties overseas is included in the definition of investment in foreign currency assets and will be subject to the prevailing rules on investment in foreign currency assets.
   
    
D. Borrowings


9. Does a resident individual need to seek permission to repay a loan obtained from a non-resident?
   
   Prior permission is not required for the repayment if the underlying loan was obtained with specific approval of the Controller of Foreign Exchange or within the generally permitted limit under the current rules on foreign currency borrowings. Please note that the repayment should be made in accordance with the terms and conditions of the approved loan.
    
10. Can a resident individual swap his/her outstanding foreign currency debt obligation into another foreign currency debt obligation?
    
    Yes, a resident individual can undertake the swap arrangement with a licensed onshore bank, an International Islamic bank or a non-resident subject to the prevailing rules on foreign currency credit facility obtained by residents.
     
11. Can a resident individual swap his/her outstanding ringgit debt obligation into a foreign currency debt obligation?
    
    Yes, a resident individual can swap his outstanding ringgit debt obligation into a foreign currency debt obligation only with a licensed onshore bank subject to the prevailing rules on foreign currency borrowings obtained by residents.
     
12. Can a resident individual lend in foreign currency to his/her immediate family members overseas?
    
    Yes, a resident individual is allowed to lend any amount in foreign currency to immediate family members, comprising parents, children, husband or wife as well as siblings.
    
     
E. Guarantees


13. Can a resident individual issue a personal guarantee to an overseas bank to guarantee a loan obtained by his/her non-resident relatives from the bank?
    
    Yes, a resident individual is allowed to issue financial guarantees, i.e. guarantees to secure a loan on behalf, or in favour, of non-residents provided that if the aggregate amount of financial guarantees issued by the resident individual exceeds RM50 million equivalent, any subsequent financial guarantees to be issued, irrespective of amount, must be registered with the Controller of Foreign Exchange at least 7 working days prior to the issuance of the guarantee. However, the Controller may reject any application for registration of a financial guarantee based on the following:
    • The financial guarantee is obtained or issued for a credit facility which is not used to finance activities that will benefit Malaysia;
    • Non-alignment to the principle of non-internationalisation of ringgit policy; or
    • Non-compliance of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001.
       
14. Can a resident individual make a payment arising from a guarantee to a non-resident?
    • Yes, provided that the financial guarantee has been registered with the Controller of Foreign Exchange.
    • Based on the prevailing foreign exchange administration rules, a resident individual is required to register financial guarantees with the Controller of Foreign Exchange, if the aggregate amount of financial guarantees issued or obtained by the resident individual exceeds RM50 million equivalent.
    • Payment arising from a guarantee below the above limit is freely allowed.
       
F. Others


15. Can a resident individual remits funds to pay for their children’s education overseas?
    
    Yes. The resident individual, however, is required to provide supporting documents to the remitting bank, failing which, the remittance will be subject to the prevailing rules on investment in foreign currency assets.
     
16. Does a resident individual need prior permission to open a foreign currency account?
    
    No. Resident individuals are freely allowed to open foreign currency account in Malaysia or overseas. The foreign currency account for the purpose of placement of funds is subject to the prevailing rules on investment in foreign currency assets.
     
17. I am a resident with a child studying abroad. Can my child and I open a joint bank account with an overseas bank?
    
    Yes
     
18. How much ringgit can a resident individual convert to credit into a foreign currency account for education/employment overseas?
    
    A resident individual may convert any amount of ringgit into foreign currency for crediting into a foreign currency account for education/employment overseas, provided the resident has relevant documentary evidence to substantiate the education/employment overseas.
     
19. Where can I seek more information on foreign exchange administration rules in Malaysia?
    • Information on the foreign exchange administration rules can be obtained at www.bnm.gov.my/fxadmin.
    • Clarification on the foreign exchange administration rules can be obtained at the BNMLINK or BNMTELELINK, Bank Negara Malaysia at 1-300-88-5465.
       
20. How can I apply for permission to undertake transactions which require approval?
    
    Applications can be submitted online at http://www.bnm.gov.my/fxadmin. For applications which online forms are not available, applicants can submit via written applications to the following address:
    
    Director
    Foreign Exchange Administration Department
    Bank Negara Malaysia
    Jalan Dato Onn
    50480 Kuala Lumpur
    Fax: 03-26913266 / 03-26937322

For a list of application forms and their user guides, click here.

II. FAQs related to Resident Companies

A. General payments

1. As a resident company, we need to pay our overseas supplier for purchase of goods and services. Is there any restriction?
2. My company and another resident company have been awarded a joint venture project overseas. Can we open a joint foreign currency account to facilitate payments and receipts under this project?
3. My company has export earnings. Can my company use the foreign currency funds to pay another Malaysian company for settlement of domestic goods and services?
4. Can a resident exporter pay in foreign currency to an individual agent acting on behalf of a resident supplier?
5. Can a Malaysian company with export earnings pay another resident company for settlement of domestic trade and services using proceeds from foreign currency trade financing facilities obtained from onshore banks, if it has insufficient or no foreign currency funds at the point of payment?
6. Can a Malaysian company decline to accept payment in foreign currency from another Malaysian company?
7. Can a resident company invoice another resident company in foreign currency for sales of goods and services?
8. Can a Malaysian company with no export earnings use foreign currency received from a resident company to pay to another Malaysian company to settle the purchase of goods and services?
9. Can a Malaysian company pay another Malaysian company in foreign currency for trade-related services such as insurance, fees and commissions?
10. Can a Malaysian company with export earnings pay another resident company for settlement of domestic goods and services through conversion of ringgit trade financing facilities or its own ringgit funds, if it has insufficient foreign currency funds at the point of payment?


B. Investment in foreign currency assets

11. We are a company incorporated in Malaysia. Can we send money abroad to purchase shares in a company outside Malaysia?
12. Our company has domestic ringgit borrowings from banks in Malaysia. We plan to expand our production capacity and acquire 60% shareholding in an overseas company amounting to the equivalent of RM300 million. We propose to undertake the investments by remitting-
    (a) RM100 million equivalent using company’s existing foreign currency funds; and
    (b) RM200 million equivalent through the conversion of ringgit.
    Do we require prior permission from Bank Negara Malaysia for the proposed investment?
13. Can resident companies with domestic ringgit borrowings seek a blanket approval from Bank Negara Malaysia to freely invest abroad for expansion of their businesses?
14. What is direct investment abroad?
15. A company which has 3% equity ownership in a non-resident company intends to increase its equity holding to 15%. Is the additional equity investment considered direct investment abroad?

C. Borrowings
16. We are a foreign-owned company in Malaysia. We plan to obtain foreign currency borrowings to finance our operations. Is there a limit on the amount that we can borrow?
17. What is deemed as a related company?
18. My company has obtained foreign currency borrowings from a non-resident. Can we hedge the principal and interest payment of the borrowings?
19. Can a company swap its outstanding foreign currency debt obligation into another foreign currency debt obligation?
20. Can a company swap its outstanding ringgit debt obligation into a foreign currency debt obligation?
21. Can a resident company convert ringgit into foreign currency to lend to its resident related company?
22. Can a resident company swap its ringgit debt obligation into a foreign currency debt obligation with an overseas bank?
23. Can a resident company repay its foreign currency credit facility from another related resident company in ringgit?
24. Can a resident company borrow in ringgit from its non-resident related companies?
25. Where can a non-resident company source ringgit to lend to its related resident company?
26. What are the activities in the real sector in Malaysia?


D. Guarantees
27. Can a resident company obtain a guarantee from an overseas bank to secure a credit facilitiy obtained by its overseas subsidiary from a foreign bank?
28. A resident company has extended a corporate guarantee on behalf of its overseas subsidiary to secure a credit facility. Can payment be made under the guarantee to the non-resident lender if the subsidiary defaults its repayment?


E. Export of goods
29. My company is a resident exporter with a foreign currency account maintained with a licensed onshore bank. Can I use the funds in the foreign currency account to make import payments or settle other foreign currency payment obligations?
30. Do I need to submit any report on exports of goods to Bank Negara Malaysia?


F. Hedging
31. My company has foreign currency borrowings obtained from a non-resident. Can we hedge the repayment and interest payment of the borrowings?
32. My company is an exporter. We will be receiving export proceeds in foreign currency periodically. We have existing ringgit borrowings from a licensed onshore bank. Can we swap the ringgit debt obligation into foreign currency debt obligation to match with the currency of our future export proceeds to be received?


G. Others
33. Where can I seek more information on foreign exchange administration rules in Malaysia?
34. How can I apply to undertake transactions which require approval?

A. General payments

1. As a resident company, we need to pay our overseas supplier for purchase of goods and services. Is there any restriction?
   
   A resident company can pay a non-resident for the purchase of goods and services both in ringgit and foreign currency. When settlement for the import and export of goods and services with non-residents is in ringgit, payment in ringgit by the resident to the non-resident or vice-versa must be made into/from an External Account of the non-resident or a non-resident financial institution.
    
2. My company and another resident company have been awarded a joint venture project overseas. Can we open a joint foreign currency account to facilitate payments and receipts under this project?
   
   Prior permission from the Controller of Foreign Exchange is required for the resident companies to open and maintain joint foreign currency accounts.
    
3. My company has export earnings. Can my company use the foreign currency funds to pay another Malaysian company for settlement of domestic goods and services?
   
   Yes.
    
4. Can a resident exporter pay in foreign currency to an individual agent acting on behalf of a resident supplier?
   
   No, the flexibility is granted only for payments by a resident company directly to another resident company.


5. Can a Malaysian company with export earnings pay another resident company for settlement of domestic trade and services using proceeds from foreign currency trade financing facilities obtained from onshore banks, if it has insufficient or no foreign currency funds at the point of payment?
   
   A resident company with export earnings may use foreign currency trade financing obtained from onshore banks to pay another resident company for settlement of goods and services.
    


6. Can a Malaysian company decline to accept payment in foreign currency from another Malaysian company?
   
   Yes, payment in foreign currency between residents should be based on willing buyer willing seller arrangement.


7. Can a resident company invoice another resident company in foreign currency for sales of goods and services?
   
   There is no restriction for invoicing in foreign currency between resident companies for the purchase of domestic goods and services. However, the actual payment in foreign currency for the settlement of goods and services may be made only by a resident company with export earnings through its foreign currency account.


8. Can a Malaysian company with no export earnings use foreign currency received from a resident company to pay to another Malaysian company to settle the purchase of goods and services?
   
   No. Only resident companies with own export earnings can pay another resident company in foreign currency for settlement of goods and services.


9. Can a Malaysian company pay another Malaysian company in foreign currency for trade-related services such as insurance, fees and commissions?
   
   Yes, provided that the resident payer is a company with export earnings.


10. Can a Malaysian company with export earnings pay another resident company for settlement of domestic goods and services through conversion of ringgit trade financing facilities or its own ringgit funds, if it has insufficient foreign currency funds at the point of payment?
    
    A resident company with export earnings may convert proceeds of ringgit trade financing facilities to pay another resident company in foreign currency for settlement of domestic goods and services. However, the conversion of ringgit into foreign currency is subject to the rules on investment in foreign currency assets.


B. Investment in foreign currency assets

11. We are a company incorporated in Malaysia. Can we send money abroad to purchase shares in a company outside Malaysia?
    • A resident company is free to invest in foreign currency assets using its own foreign currency funds, proceeds from permitted foreign currency borrowings and proceeds from the listing of an Initial Public Offering on the Main Market of Bursa Malaysia. There is also no restriction for a Malaysian company without domestic ringgit credit facility to remit any amount of funds for investment in foreign currency assets.
    • A limit of RM50 million equivalent in aggregate per calendar year on corporate group basis is applicable only for investments by a resident company with domestic ringgit borrowings and who is converting ringgit into foreign currency for the investment. Prior permission from the Controller of Foreign Exchange is required for investment exceeding the permissible limit.
12. Our company has domestic ringgit borrowings from banks in Malaysia. We plan to expand our production capacity and acquire 60% shareholding in an overseas company amounting to the equivalent of RM300 million. We propose to undertake the investments by remitting-
    (a) RM100 million equivalent using company’s existing foreign currency funds; and
    (b) RM200 million equivalent through the conversion of ringgit.
    
    Do we require prior permission from Bank Negara Malaysia for the proposed investment?
    • Permission is not required for the remittance of RM100 million equivalent sourced from its existing foreign currency funds for (a) above.
       
    • Prior permission is required for the remittance through conversion of ringgit for (b) above.
       
13. Can resident companies with domestic ringgit borrowings seek a blanket approval from Bank Negara Malaysia to freely invest abroad for expansion of their businesses?
    
    Resident companies that meet prudential requirements set by Bank Negara Malaysia may be given flexibility to undertake any amount of direct investment abroad. The prudential requirements include:
    • good corporate governance;
    • meets disclosure and reporting requirements set by Bank Negara Malaysia; and
    • robust internal risk management.


14. What is direct investment abroad?
    
    Direct investment abroad includes:
    • investment resulting in at least 10% of equity ownership or control of a non-resident company;
    • inter-company lending to non-resident related companies; or
    • capital expenditure in unincorporated entities, including branches or projects by agreement where no establishment is created as follows:
      • where capital contribution is at least 10% of project cost;
      • where the resident is entitled to at least 10% of profits from the unincorporated entity or project; or
      • where the resident has management control of the unincorporated entity or project.


15. A company which has 3% equity ownership in a non-resident company intends to increase its equity holding to 15%. Is the additional equity investment considered direct investment abroad?
    
    Yes. The additional investment will result in at least 10% equity ownership in the non-resident company.
    
     
C. Borrowings

16. We are a foreign-owned company in Malaysia. We plan to obtain foreign currency borrowings to finance our operations. Is there a limit on the amount that we can borrow?
    • A foreign-owned company established in Malaysia is deemed as a resident for foreign exchange administration purposes.
    • As a resident company, the foreign-owned company is free to borrow any amount in foreign currency from:
      • Non-resident non-bank related companies (excluding a non-resident company which is set up solely to obtain foreign currency borrowings from non-resident financial institutions);
      • Other resident related companies in Malaysia;
      • Licensed onshore banks; and
      • Licensed International Islamic Banks
    • A resident company is also allowed to borrow in foreign currency up to the equivalent of RM100 million in aggregate on corporate group basis from other non-residents, including through the issuance of foreign currency-denominated bonds onshore and offshore.
17. What is deemed as a related company?
    
    A related company includes the resident company’s:
    • Ultimate holding company;
    • Parent or head office;
    • Branches;
    • Subsidiaries (companies that are more than 50% owned by the resident company);
    • Associate companies (companies that have between 10% and 50% shareholding relationship with the resident company); or
    • Sister companies (companies that have common shareholders with the resident company).


18. My company has obtained foreign currency borrowings from a non-resident. Can we hedge the principal and interest payment of the borrowings?
    
    Yes. Your company can hedge up to the full amount of principal and interest payments of the borrowings with the licensed onshore banks.


19. Can a company swap its outstanding foreign currency debt obligation into another foreign currency debt obligation?
    
    Yes, a resident company can enter into a swap arrangement to swap its outstanding foreign currency debt obligation into another foreign currency debt obligation with a licensed onshore bank, an International Islamic bank or a non-resident subject to the prevailing rules on foreign currency borrowings obtained by residents.


20. Can a company swap its outstanding ringgit debt obligation into a foreign currency debt obligation?
    
    Yes, a resident company can enter into a swap arrangement to swap its outstanding ringgit debt obligation into a foreign currency debt obligation with a licensed onshore bank subject to the condition that there is no actual delivery of the foreign currency at the inception of the transaction.


21. Can a resident company convert ringgit into foreign currency to lend to its resident related company?
    
    Yes, subject to the prevailing rule on investment in foreign currency assets.


22. Can a resident company swap its ringgit debt obligation into a foreign currency debt obligation with an overseas bank?
    
    No.


23. Can a resident company repay its foreign currency credit facility from another related resident company in ringgit?
    
    Yes.


24. Can a resident company borrow in ringgit from its non-resident related companies?
    
    Yes, any amount other than a non-resident related company that is solely set up to obtain foreign currency loan from a non-resident financial institution. The ringgit loan proceeds can only be used to finance real sector activites in Malaysia.
    
    Ringgit loans from other non-bank non-residents, including a non-resident related company that is solely set up to obtain foreign currency loan from a non-resident financial institution, is limited to an aggregate of RM1 million.


25. Where can a non-resident company source ringgit to lend to its related resident company?
    
    The non-resident company can source ringgit from the following:
    • Existing ringgit funds from the external account of the non-resident company maintained with a licensed onshore bank; or
    • Conversion of foreign currency into ringgit with a licensed onshore bank.


26. What are the activities in the real sector in Malaysia?
    
    These are activities where there are production of goods and services, except financial services (such as financial leasing services or investment and portfolio management services). For example, a loan to finance the expansion of the resident company's production line is considered a credit facility to finance an activity in the real sector.


D. Guarantees

27. Can a resident company obtain a guarantee from an overseas bank to secure a credit facilitiy obtained by its overseas subsidiary from a foreign bank?
    
    A resident company is allowed to issue financial guarantees, i.e. guarantees to secure a financing, on behalf or in favour of non-residents provided that if the aggregate amount of financial guarantees issued by the resident company exceeds RM50 million equivalent, any subsequent financial guarantees to be issued, irrespective of amount, must be registered with the Controller of Foreign Exchange at least 7 working days prior to the issuance of the guarantee. However, the Controller may reject any application for registration of a financial guarantee based on the following:
    • The financial guarantee is obtained or issued for a credit facility which is not used to finance activities that will benefit Malaysia;
    • Non-alignment to the principle of non-internationalisation of ringgit policy; or
    • Non-compliance of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001.


28. A resident company has extended a corporate guarantee on behalf of its overseas subsidiary to secure a credit facility. Can payment be made under the guarantee to the non-resident lender if the subsidiary defaults its repayment?
    
    Yes, provided all registrations of guarantees as required under the prevailing rules has been made to the Controller of Foreign Exchange and an acknowledgement has been received.


E. Export of goods

29. My company is a resident exporter with a foreign currency account maintained with a licensed onshore bank. Can I use the funds in the foreign currency account to make import payments or settle other foreign currency payment obligations?
    • Yes, the funds in the foreign currency account may be used to meet any foreign currency payment obligations, such as import or services payments to non-residents, repayment of permitted foreign currency borrowings and permitted investments in foreign currency assets, including those marketed by licensed onshore banks.
       
    • The funds in foreign currency account may also be used to pay another resident company in foreign currency for settlement of goods and services.


30. Do I need to submit any report on exports of goods to Bank Negara Malaysia?
    
    Only exporters with exports exceeding RM50 million in the preceeding calendar year are required to submit quarterly reports. The report should be submitted online through Foreign Exchange Administration website at www.bnm.gov.my/fxadmin


F. Hedging
31. My company has foreign currency borrowings obtained from a non-resident. Can we hedge the repayment and interest payment of the borrowings?
    
    Yes. Your company can hedge up to the full amount of principal and interest payments of the borrowings with the licensed onshore banks.


32. My company is an exporter. We will be receiving export proceeds in foreign currency periodically. We have existing ringgit borrowings from a licensed onshore bank. Can we swap the ringgit debt obligation into foreign currency debt obligation to match with the currency of our future export proceeds to be received?
    
    Yes. The swap transaction must be undertaken only with a licensed onshore bank.


G. Others
33. Where can I seek more information on foreign exchange administration rules in Malaysia?
    • Information on the foreign exchange administration rules can be obtained at www.bnm.gov.my/fxadmin.
       
    • Clarification on the foreign exchange administration rules can be obtained at the BNMLINK or BNMTELELINK, Bank Negara Malaysia at 1-300-88-5465.
34. How can I apply to undertake transactions which require approval?
    
    Applications can be submitted online at http://www.bnm.gov.my/fxadmin. For applications which online forms are not available, applicants can submit via written applications to the following address:
    
    Director
    Foreign Exchange Administration Department
    Bank Negara Malaysia
    Jalan Dato Onn
    50480 Kuala Lumpur
    Fax: 03-26913266 / 03-26937732

For a list of application forms and their user guides, click here.

III. FAQs related to Foreign Currency Trading by Resident Individuals and Companies

1. Can a resident individual or company undertake foreign currency trading?
2. I have heard about a scheme which offers foreign currency trading by non-bank entities. Is this allowed? How does such a scheme operate?
3. I work for an advertising company. We received a number of orders to design, print and distribute posters on behalf of a client, a company promoting training on foreign currency trading. Is such activity legal in Malaysia?
4. My cousin has enticed me to invest in one of the schemes offered by his company, purportedly involving the buying and selling of foreign currency for investment purposes. Can a company offer such a scheme?
5. What are the risks involved if one participates in such an illegal scheme?
6. What is the penalty imposed by Bank Negara Malaysia on offenders of illegal foreign currency trading?
7. Any guide to the general public on how to detect an illegal foreign currency trading operator?
8. Where can I find the list of institutions permitted to conduct foreign currency trading in Malaysia?

1. Can a resident individual or company undertake foreign currency trading?
    

   • A resident individual or company is allowed to undertake foreign currency trading only with licensed onshore banks. The funding for the foreign currency trading from conversion of ringgit shall be made only on spot basis and is subject to the prevailing rule on investment in foreign currency assets by residents.
     
      
   • Foreign currency tradings provided by entities other than licensed onshore banks are illegal and prohibited under Section 4 of the Exchange Control Act 1953.

    

2. I have heard about a scheme which offers foreign currency trading by non-bank entities. Is this allowed? How does such a scheme operate?
   • Residents are allowed to undertake foreign currency trading only with licensed onshore banks.
      
   • Foreign currency tradings provided by entities other than licensed onshore banks are illegal and prohibited under Section 4 of the Exchange Control Act 1953.
      
   • The modus operandi of such illegal schemes/scams includes, amongst others, as follows:
     • Offer free training, seminars or workshops to lure investors, prior to inviting investors to set-up an online foreign currency trading account with a principal company (purported to have valid licence to trade foreign currency overseas);
     • Provide convenient access to the principal company's website and trading facilities to facilitate online foreign currency trading by investors;
     • Recruit fresh graduates as marketing executives and encouraging them to get their family and friends to trade foreign currency; and
     • Require investors to deposit an amount of money into a bank account to begin trading foreign currency, and subsequently, requesting for a top up on their initial investment ("margin call") to avoid losing their capital.


3. I work for an advertising company. We received a number of orders to design, print and distribute posters on behalf of a client, a company promoting training on foreign currency trading. Is such activity legal in Malaysia?
   • Under Section 4A of the Exchange Control Act 1953 (the ECA), it is an offence for any person, other than an authorised dealer to:
     • issue or publish or facilitate the issuance or publication by any person of an advertisement containing an invitation or an offer to buy or sell foreign currency or information which is intended or might reasonably be presumed to be intended to lead directly or indirectly to the buying or selling of foreign currency; or
     • aid or abet another person to do the above.
        
   • "Advertisement" means the disseminating or conveying of information, invitation or solicitation by any means or in any form, including by means of:
     • print media
     • posters, notices or signboards
     • circulars, brochures, pamphlets or books
     • letters addressed to individuals or bodies
     • electronic media
        
   • You are advised to take the appropriate measures and action to ensure all advertisements issued through your company comply with the ECA.


4. My cousin has enticed me to invest in one of the schemes offered by his company, purportedly involving the buying and selling of foreign currency for investment purposes. Can a company offer such a scheme?
   
   No. As stipulated under Sections 4 and 4A of the Exchange Control Act 1953, it is an offence for any person other than authorised dealers to be involved in:
   • buying or selling of foreign currency with any person;
   • conducting of any form of training, seminar, workshops which involve, or are preparatory to, buying or selling foreign currency; or
   • issuing, publishing or facilitating the issuance or publication of an advertisement intended to lead to the buying, borrowing, selling or lending of any foreign currency.
5. What are the risks involved if one participates in such an illegal scheme?
   • Participation in such an illegal scheme is an offence under the Exchange Control Act 1953 and on conviction, is liable to a fine not exceeding RM1 million or to imprisonment for a term not exceeding five years or to both. When a participant lost money in the illegal scheme, it would be a lengthy and costly process for a participant to engage lawyers to bring a civil suit against the perpetrators.
      
   • In addition, in most cases, the victims of these schemes would lose all their money. Those who had acted as middle men or agents would also run the risk of themselves or their family members being threatened or face physical harm when the scheme fails.
6. What is the penalty imposed by Bank Negara Malaysia on offenders of illegal foreign currency trading?
   
   Pursuant to the Exchange Control Act 1953, any person involved in illegal foreign currency trading shall, on conviction, be liable to a fine not exceeding RM1 million or to imprisonment for a term not exceeding five years or to both.
    
7. Any guide to the general public on how to detect an illegal foreign currency trading operator?
   • Members of the public are advised to be careful and not to fall prey to operators of these illegal schemes.
      
   • The guides on how to detect illegal operators and warning signs for investors can be obtained from the website, http://www.bankinginfo.com.my under "Help & Advice/Helpful Guides/Financial Scams".
      
   • In general, the illegal operators normally:
     • Place attractive advertisements to lure others to listen to their convincing but bogus marketing plan;
     • Have their headquarters overseas;
     • Have impressive offices and IT facilities;
     • Conduct training to prospective employees on the principles of foreign exchange trading and hands-on exercises on foreign currency dealing using dummy or fake transactions under an environment controlled by the operator. Normally, all such dummy transactions will result in profits;
     • Hire employees based on commission without proper employment letter or contract stipulating the terms and conditions of employment.
        
   • Before employees can start dealing, they are required to look for potential investors and collect deposits from them. Otherwise, they risk losing their jobs. They will try to impress potential investors:-
     • With the marketing strategy of the company which promises quick and high returns;
     • By portraying a professional and reputable image with smart-looking employees, a high-tech office layout and advanced IT facilities. In some cases, investors are even allowed to operate their account via internet;
     • With tools of the trade e.g. a news screen showing movements in exchange rates to give the impression that a professional and legitimate business is being conducted. These facilities are merely cosmetic and do not reflect an actual foreign currency trading office.
        
   • Investors can either trade using their trading accounts with the company or through dealers appointed by the company. Investors are also required to sign a business contract which is normally entered between the investors and the company. In most instances, the operators will inform the investors that they will have to send such contracts to its company's headquarters based overseas for signing. However, such contracts are usually left unsigned. As such, in the event the investors are not happy with the transaction, no action can be taken against the company as there is no binding contract between them.
      
8. Where can I find the list of institutions permitted to conduct foreign currency trading in Malaysia?
   
   The list of institutions which are permitted to conduct foreign currency business in Malaysia is available from Bank Negara Malaysia's website at http://www.bnm.gov.my under "Related Links”.
    

IV. FAQs related to Non-Resident Individuals and Companies

A. Import and export of currency
1. Can a non-resident traveller carry, in person or in baggage, ringgit or foreign currency notes into or out from Malaysia?
   
   B. General payments
2. Can a non-resident individual make payments in ringgit or foreign currency to his resident wife for any purpose?
3. How can a non-resident make payment in ringgit to a resident exporter?
4. Can a non-resident make payment in ringgit through an overseas bank other than an appointed overseas branch within the same banking group of a licensed onshore bank?
5. Does a non-resident require an External Account to receive payment in ringgit?
   
   C. Investment in Malaysia
6. Is there any restriction for a non-resident to invest in Malaysia and later transfer any profits and divestment proceeds abroad?
   
   D. External Account (Ringgit Account)
7. I am a non-resident with more than one External Account. Can I transfer funds from one account to the other?
8. Can I transfer funds from my External Account to my wife’s External Account?
9. I am a non-resident and residing overseas. I am interested to buy ringgit assets but have difficulty in accessing the Malaysian financial markets to purchase ringgit due to the time zone differences. Can I purchase ringgit to finance my investments in Malaysia from financial institutions in my home country?
10. What can the non-resident do with the funds in the External Account?
    
    E. Borrowings
11. Can a non-resident individual obtain a property loan to finance the purchase of a property as a personal investment and not for his own use?
12. Can a non-resident individual borrow in ringgit from his non-resident brother for any purpose?
13. Can a non-resident borrow in ringgit to purchase shares of a Malaysian company?
14. What are the activities in the real sector?
15. Is purchase of shares in a Malaysian company deemed as an activity in the real sector?
16. Can a non-resident company borrow in ringgit in Malaysia for any purpose?
17. Where can a non-resident obtain ringgit to facilitate the trade settlements?
    
    F. Hedging
18. Are non-residents allowed to sell forward foreign currency against ringgit for deposit into the External Account pending investment in Malaysia?
19. Who can a non-resident buy or sell ringgit against foreign currency to hedge its ringgit exposure?
20. Can a non-resident hedge his ringgit receivables and payables?
21. Can a non-bank non-resident enter into a ringgit-denominated interest rate derivative contract with a licensed onshore bank?
    
    G. Others
22. My company in Malaysia is owned by non-residents. Is my company considered as a non-resident?
23. Can a non-resident corporation remit the listing proceeds from an Initial Public Offering (IPO) on the Main Market of Bursa Malaysia, abroad?
24. Where can I seek more information on foreign exchange administration rules in Malaysia?
25. How can I apply to undertake transactions which require approval?

A. Import and export of currency

1. Can a non-resident traveller carry, in person or in baggage, ringgit or foreign currency notes into or out from Malaysia?
    

   • There is no restriction for a non-resident traveller to bring into or out from Malaysia any amount of foreign currency notes, including traveller’s cheques.
      
   • The amount of ringgit notes that a non-resident traveller can bring into or out from Malaysia is only up to USD10,000 equivalent.
      
   • For a non-resident who intends to bring in or out, ringgit notes exceeding the limit stated above, prior permission must be obtained from the Controller of Foreign Exchange.

    

   B. General payments
2. Can a non-resident individual make payments in ringgit or foreign currency to his resident wife for any purpose?
   
   Yes, a non-resident individual is allowed to make payments in ringgit or foreign currency to his immediate family members i.e parents, children, husband or wife as well as siblings.
    
3. How can a non-resident make payment in ringgit to a resident exporter?
   
   Payment in ringgit by a non-resident must be effected through an External Account of the non-resident or an External Account of a non-resident financial institution where the licensed onshore bank is able to verify the trade transactions.
    
4. Can a non-resident make payment in ringgit through an overseas bank other than an appointed overseas branch within the same banking group of a licensed onshore bank?
   
   Yes. The non-resident can sell foreign currency for ringgit with an overseas bank to pay a resident as settlement for the purchase of goods and services. The licensed onshore bank shall ensure that it is able to verify that the payment in ringgit is for settlement of international trade in goods or services between a resident and a non-resident.
    
5. Does a non-resident require an External Account to receive payment in ringgit?
   
   Yes.
   
   C. Investment in Malaysia
6. Is there any restriction for a non-resident to invest in Malaysia and later transfer any profits and divestment proceeds abroad?
   • Non-residents are free to invest in any form of ringgit assets in Malaysia; and
   • They are also free to remit out divestment proceeds, profits, dividends or any income arising from these investments in Malaysia.
   
   D. External Account (Ringgit Account)
7. I am a non-resident with more than one External Account. Can I transfer funds from one account to the other?
   
   Yes, the transfer of funds from an External Account to another External Account belonging to the same account holder is allowed.
    
8. Can I transfer funds from my External Account to my wife’s External Account?
   
   Yes, the transfer of funds between non-residents who are immediate family members (i.e. parents and children, husband and wife as well as siblings) is allowed.
    
9. I am a non-resident and residing overseas. I am interested to buy ringgit assets but have difficulty in accessing the Malaysian financial markets to purchase ringgit due to the time zone differences. Can I purchase ringgit to finance my investments in Malaysia from financial institutions in my home country?
   
   Yes. Non-resident investors may purchase ringgit from an appointed overseas branch within the same banking group of a licensed onshore bank to facilitate settlement for the purchase of ringgit assets with firm underlying commitment.
    
10. What can the non-resident do with the funds in the External Account?
    • A non-resident can use its ringgit funds in the External Account, among others, to pay for goods and services* in Malaysia or to purchase ringgit assets** in Malaysia.
       
    • The non-resident may also convert the ringgit into foreign currency with a licensed onshore bank or an appointed overseas branch within the same banking group of a licensed onshore bank for repatriation abroad.
       
    * Services include:
    1. Transportation, travel; or
    2. Business services (merchanting trade, consultation, legal, accounting, communication, education, medical, construction, insurance).
    
    **Ringgit assets include:
    1. Ringgit-denominated securities including bills of exchange, private debt securities, Cagamas bonds or notes, Malaysian Government Securities, Treasury Bills, shares and warrants;
    2. Derivatives traded on Bursa Malaysia and OTC derivatives (excluding OTC derivatives and structured products which tantamount to lending or borrowing of ringgit between residents and non-residents);
    3. Fixed deposits and negotiable instruments of deposits denominated in ringgit;
    4. Immovable properties in Malaysia; and
    5. Other fixed assets in Malaysia.

     

    E. Borrowings
11. Can a non-resident individual obtain a property loan to finance the purchase of a property as a personal investment and not for his own use?
    
    Yes.
     
12. Can a non-resident individual borrow in ringgit from his non-resident brother for any purpose?
    
    Yes, a non-resident individual is allowed to borrow any amount in ringgit or foreign currency from his resident or non-resident immediate family members (i.e. parents, children, husband or wife as well as siblings) for any purpose.
     
13. Can a non-resident borrow in ringgit to purchase shares of a Malaysian company?
    
    Yes. A non-resident may obtain ringgit margin financing facility from a resident stock broking company or a licensed onshore bank with stockbroking licence pursuant to guidelines issued by Bursa Malaysia.
     
14. What are the activities in the real sector?
    
    Activities in the real sector involves the production of goods and services, except financial services (such as financial leasing services or investment and portfolio management services). Example: construction services to expand factory of a resident company.
     
15. Is purchase of shares in a Malaysian company deemed as an activity in the real sector?
    
    No.
     
16. Can a non-resident company borrow in ringgit in Malaysia for any purpose?
    
    No. A non-resident can only borrow in ringgit to finance activities in the real sector in Malaysia, including the purchase of immovable property, except for purchase of land only.
     
17. Where can a non-resident obtain ringgit to facilitate the trade settlements?
    
    A non-resident can obtain ringgit from the following sources:
    • the non-resident's own External Account maintained with a licensed onshore bank;
    • sale of foreign currency for ringgit with a licensed onshore bank or an appointed overseas branch within the same banking group of a licensed onshore bank; or
    • ringgit trade financing facility from a licensed onshore bank.
    
    F. Hedging
18. Are non-residents allowed to sell forward foreign currency against ringgit for deposit into the External Account pending investment in Malaysia?
    
    No.
     
19. Who can a non-resident buy or sell ringgit against foreign currency to hedge its ringgit exposure?
    • The non-resident can buy and sell ringgit with any licensed onshore bank of any amount on –
      • spot basis, with or without firm underlying commitment; or
      • forward basis with firm underlying commitment
    • This is irrespective whether the ringgit asset is maintained with the foreign exchange counterparty or a different licensed onshore bank.


20. Can a non-resident hedge his ringgit receivables and payables?
    
    Yes. The non-resident is free to hedge his ringgit receivables and payables with a licensed onshore bank or an appointed overseas branch within the same banking group of a licensed onshore bank.
     
21. Can a non-bank non-resident enter into a ringgit-denominated interest rate derivative contract with a licensed onshore bank?
    
    Yes, a non-bank non-resident is free to enter into a ringgit-denominated interest rate derivative contract with a licensed onshore bank. The transaction need not be supported with any firm underlying commitment.
    
    G. Others
22. My company in Malaysia is owned by non-residents. Is my company considered as a non-resident?
    
    No. Your company is a resident company as long as it is registered with or approved by any authority in Malaysia. The company is subject to all foreign exchange administration rules like any other resident companies in Malaysia.
     
23. Can a non-resident corporation remit the listing proceeds from an Initial Public Offering (IPO) on the Main Market of Bursa Malaysia, abroad?
    
    Yes. A non-resident corporation is freely allowed to utilise proceeds arising from the listing of IPO abroad. The proceeds must be converted into foreign currency prior to the remittance abroad.
     
24. Where can I seek more information on foreign exchange administration rules in Malaysia?
    • Information on the foreign exchange administration rules can be obtained at www.bnm.gov.my/fxadmin.
       
    • Clarification on the foreign exchange administration rules can be obtained at the BNMLINK or BNMTELELINK, Bank Negara Malaysia at 1-300-88-5465.


25. How can I apply to undertake transactions which require approval?
    
    Applications can be submitted online at http://www.bnm.gov.my/fxadmin. For applications which online forms are not available, applicants can submit via written applications to the following address:
    
    Director
    Foreign Exchange Administration Department
    Bank Negara Malaysia
    Jalan Dato Onn
    50480 Kuala Lumpur
    Fax: 03-26913266 / 03-26937732
     

For a list of application forms and their user guides, click here.

1. What is Payment System or Designated Payment Instrument (DPI)?

Please refer to Bank Negara Malaysia's payment system micro site (http://www.bnm.gov.my/microsites/payment/index.htm) as well as the Submission Guideline for information on payment system and/or designated payment instrument.

2. Is the RM500 fee compulsory? Will I receive a refund if Bank Negara Malaysia (Bank) rejects my application?

Yes, the fee is compulsory and is not refundable.

3. If I am submitting two applications i.e. to apply for written notification and approval pursuant to section 5 and 25 of the PSA, do I only submit one set of documents/information and pay RM500 processing fee for both applications?

Applicant is required to submit a set of the required documents/information and pay a fee of RM500 for each application submitted to Bank Negara Malaysia.

4. For notification to operate a payment system pursuant to section 5 of the PSA, applicant is required to submit information and documents as specified under section B, subsection f(i), f(iii) and f(v) of the Submission Guideline. What are they?

Example of documents required:

(i) System operating procedures that outlines the processes and workflow of the system, which among others, includes:

• Definition and overview of the system
• System components
• General and specific requirements of the system
• Operating hours
• End-to-end system's process flow which should include among others:

  - Detailed functions or actions performed by each component/party/process, starting from the initiation until completion of the process

  - Process of transfer of funds from one-end to another, if any

  - Clearing and settlement arrangement process of each transaction, if any.

  - All possible scenarios for the proposed services/system

(ii) Participation and operations rules that establishes governance framework, which among others,  includes:

• Membership contract and terms and conditions
• Duties and responsibilities of operators and participants
• Risk management
• Fees and charges
• Specific and general requirements e.g. requirement for confidentiality, integrity and availability (CIA), dispute handlings and resolutions

Note: Sample of agreement will be accepted as supplementary document only

(iii) System documentation that outlines the set up and arrangement to ensure safety, security and operational reliability of the system, which among others, includes:

• System architecture
• Security arrangement e.g. for hardware, software, data and network
• Backup and/or business continuity arrangement

5. The company applying for the written notification to operate payment system and/or approval to issue DPI is newly established and does not have audited financial statement. Does applicant need to submit alternative document to Bank Negara Malaysia?

Applicant shall submit the following alternative documents:

• Parent company's audited financial statement (if available)
• Latest company's bank statement
• Form 24

6. Will Bank Negara Malaysia process my application if I did not submit complete information and documents as required under the Submission Guideline?

The application will only be processed upon receiving the RM500 fee and complete submission of the information and documents.

7. Will Bank Negara Malaysia require additional information/documents, other than the items listed in the Submission Guideline?

Yes, when necessary, Bank Negara Malaysia may request applicant to furnish additional information/documents when processing an application.

1. What are the objectives of LHC's establishment?
   
   LHC is established by Bank Negara Malaysia with the aim to position Malaysian laws as the reference laws for International Islamic finance transactions. In doing so, the Committee seeks to review existing laws to improve the certainty of the usage of Malaysian laws in Islamic financial transactions at the global level.
   
   
   
2. Where can I know more about LHC?
   
   Members of the public can refer to LHC's official link on Bank Negara Malaysia's official website at http://www.bnm.gov.my/lhc/ for more details.
   
   
   
3. What are the examples of issues discussed by the Committee?
   
   Among others, the Committee will be discussing Shariah-compatibility of the existing court?s procedural laws in dealing with Islamic finance-related cases and the recognition required to be accorded on Shariah requirements in existing statutory laws with regards to Islamic finance-related matters.
   
   
   
4. What is the appropriate channel for members of the public to contribute issues/ideas/recommendations?
   
   Members of the public are welcomed to contribute issues/ideas/recommendations via email to the Secretariat of the LHC at lhsec@bnm.gov.my.
   
   
   
5. What are the proper procedures to be followed in contributing issues/ideas/recommendations?
   
   Issues/ideas/recommendations should be submitted in accordance with the specified format/template made available on Bank Negara Malaysia's official website at http://www.bnm.gov.my/lhc/. Further deliberations of the submitted issues will be undertaken at the Secretariat?s working level, and further consultations may be undertaken with identified groups representing Islamic finance industry, legal practitioners and academicians as well as relevant Ministries and regulatory agencies.
   
   
   
6. Who should I contact for further enquiries?
   
   Any queries in relation to the Law Harmonisation Committee should be forwarded to lhcsec@bnm.gov.my
   
   
   
7. What kind of updates can the public expect to receive from LHC's deliberations??????
   
   Continuous updates in the form of decisions by the Committee on issues presented and deliberated will be made available at Bank NegaraMalaysia's official website.

Introduction

Malaysian companies can now have the option to settle their trade transactions with their counterparts in China in Renminbi (RMB) in addition to other currencies such as the US dollar. All current account (goods and services) transactions are eligible for trade settlement in RMB. Since July 2009, China's government has started the use of RMB for settlement of crossborder trade.

Settlement in RMB may reduce the foreign exchange risk for exporter and importers from China and this can result in better pricing of goods and services transactions for Malaysian companies.

For Malaysian companies, they may reduce the foreign exchange risk and benefit from savings from the currency conversion spreads as it is now a direct quote from RMB to Ringgit.

See also:

• Frequently Asked Questions and Answers on Trade Settlement in Renminbi (Mandarin Version).

General

• What is the difference between renminbi and yuan?
• Who are eligible for trade settlement in RMB?
• Which Malaysian banks currently providing trade settlement in RMB?
• Where can a company obtain CNY/MYR exchange rate for a specific trade settlement transaction?
• What are the products / services provided by banks for RMB trade settlement?
• If a company in Malaysia has another CNY account with another bank in Malaysia, can the company transfer RMB between these two CNY accounts?
• Is there a minimum transactions size for settling trade in RMB?
• Is there a fee / charge imposed by banks on RMB trade settlement facility?

Malaysian Importer

• How can a company remit RMB to their counterpart in China for trade settlement?
• Can I pay RMB to any company in China?
• Are companies allowed to open a RMB account in advance of establishing a relationship with China's enterprises?
• Can a Malaysian company contract a foreign exchange forward on RMB?

Malaysian Exporter

• Can a customer in Malaysia retain the RMB proceeds in their CNY account which they received from the qualified China's enterprise?

1. What is the difference between renminbi and yuan?

Both are the same. Renminbi is the official currency of the People's Republic ofChina. Renminbi (abbreviated RMB) is the formal term most often used by Chineseofficialdom to refer to the currency. Literally, it means “People's Currency”. Theyuan meanwhile is the actual unit. ISO code for the currency however is CNY(Chinese yuan).

2. Who are eligible for trade settlement in RMB?

RMB trade settlement in the People's Republic of China has expanded nationwide since August 2011. Since then any importer in China can pay RMB to any company outside ofChina whereas eligible exporters (known as Mainland Designated Enterprises or“MDEs”) can receive RMB from any company in the world. In meeting the market demand and to liberalise and facilitate trade, with effect from March 2012, trade settlement in RMB is no longer limited to MDEs, all qualified importers and exporters are also allowed to participate in RMB trade settlement.

3. Which Malaysian banks currently providing trade settlement in RMB?

Among others are AmBank, Bank of China, CIMB, Citibank, Hong Leong, HSBC,ICBC, Maybank, OCBC, Public Bank, RHB, Standard Chartered and UOB

4. Where can a company obtain CNY/MYR exchange rate for a specific trade settlement transaction?

For general CNY/MYR exchange rate information, one can refer to Bank NegaraMalaysia's website, commercial banks' websites, Reuters and Bloomberg. Forspecific trade settlement transaction, please contact your bank for the exactexchange rate offered. Please specify to your bank you need CNY/MYR quotationfor ‘trade settlement'. This is important as the quotation for ‘trade settlement' ismore competitive compared to other purposes.

5. What are the products / services provided by banks for RMB trade settlement?

There are varieties of products / services provided by banks including:

• Issuance and payment of LC
• Bank guarantee as payment guarantee for supply of goods• Inward and outward TT
• Advising, confirmation and export bill for payment under Letter of Credit
• Documentary Collection (Import and Export)
• RMB foreign currency accounts

Please refer to your bank for details of products and services offered.

6. If a company in M'sia has another CNY account with another bank in M'sia, can the company transfer RMB between these CNY accounts?

Yes.

7. Is there a minimum transactions size for settling trade in RMB?

No.

8. Is there a fee / charge imposed by banks on RMB trade settlement facility?

Normally banks will impose certain amount of fees / charges on products andservices offered. However, there should not be any difference in terms of feescharged for RMB settlement compared to other foreign currency services offeredby the banks. You are advised to refer to your bank for details of fees and chargesimposed on the respective RMB products and services offered.

Malaysian Importer

9. How can a company remit RMB to their counterpart in China for trade settlement?

It is necessary for a company to provide documentary evidence that proof theremittance/ trade settlement is trade related. The remittance transaction must berelated to actual trade and up to the actual trade amount. In addition, the company'scounterpart in China must be a qualified exporters or an approved MDE.

10. Can I pay RMB to any company in China?

Malaysian importer can only pay to qualified exporters or MDEs in China.

11. Are companies allowed to open a RMB account in advance of establishing a relationship with an MDE?

Yes.

12. Can a Malaysian company contract a foreign exchange forward on RMB?

Forward hedging is not allowed in the pilot stage but Malaysian companies maybuy RMB ahead of a valid trade outward payment to qualified China's enterprisesup to the actual trade transaction. However, proof of the valid trade transaction isrequired and at the final discretion of the Bank.

Malaysian Exporter

13. Can a customer in M'sia retain the RMB proceeds in their CNY account which they received from the Pilot Enterprise?

Yes. They can put the RMB in deposits and earn interest, or they can keep it to beused for future payables into the Mainland China. Alternatively, the RMB proceeds canbe converted to ringgit or other foreign currencies.

For further enquiries, please contact BNMLINK or BNMTELELINK

Laman Informasi Nasihat dan Khidmat (BNMLINK)
Bank Negara Malaysia (Walk-in Customer Service Centre)
Ground Floor, D Block,
Jalan Dato' Onn
50480 Kuala Lumpur
Operating Hours: 9.00 a.m. - 5.00 p.m. (Monday - Friday)

Contact Centre (BNMTELELINK)
Bank Negara Malaysia
P.O. Box 10922
50929 Kuala Lumpur
Tel : 1-300-88-5465 (1-300-88-LINK)
(Overseas: 603-2174-1717)
Fax : 603-2174-1515
E-mail : bnmtelelink@bnm.gov.my
SMS : 15888
Operating Hours: 9.00 a.m. - 5.00 p.m. (Monday - Friday)

General

• What is CCRIS?
• What does CCRIS stand for?
• Why did Bank Negara Malaysia set up CCRIS?
• What is the Credit Bureau of Bank Negara Malaysia?
• Is the Credit Bureau's activities regulated?
• Can I prevent the Credit Bureau from holding information on me?

Obtaining the Credit Report

• Does the law allow a person to have access to a credit report on himself or herself?
• Is a financial institution allowed to access a credit report on a person who is not its customer/potential customer?
• The financial institution told me that I have a bad record in my credit report. Where can I find out the details of the record?
• How often can I get my credit report?
• Can I get CCRIS information over the phone from Bank Negara Malaysia?
• Can I get my credit report from my bank?
• Can I authorize someone to get my credit report from Bank Negara Malaysia?
• I have a friend who needs to see his credit report. Can I get the credit report on his behalf?
• I am going to be a guarantor of a loan. Can I get a copy of the credit report on the person whose loan that I guaranteed/will guarantee?
• I am a borrower. Can I get a copy of the credit report on my guarantor?
• Can I obtain the credit report on behalf of my sick mother?
• My friend's father had recently passed away. Can my friend obtain the credit report of his father?
• I am the director of the company and I would like to see the company's credit report, what is the procedure?
• How much do I have to pay for a copy of credit report?

Information in CCRIS

• Where does the Credit Bureau get its information?
• What kind of information do the financial institutions report to the Credit Bureau?
• What are the types of credit facilities reported by the financial institutions to the Credit Bureau?
• Can I have the history of all my borrowings from CCRIS?
• I am currently holding a credit card with a financial institution, is my information being captured in the CCRIS?
• I have a current account with a financial institution, will this information be captured in the CCRIS?
• I have a current account without overdraft facility but I was informed by a financial institution that I have such facility. How could this record be reported to the CCRIS?
• I was informed by a financial institution that my loan account was in arrears. If I were to settle the amount overdue, will the record be removed from my name?
• I noticed that one of my loans is reported under Special Attention Account. What is Special Attention Account?

4. Credit Facility/Financing Applications

• If my credit application is turned down by one financial institution, will all the others do the same?
• Does Bank Negara Malaysia provide any credit rating on a credit applicant?
• Is Bank Negara Malaysia dictating the credit decisions of the financial institutions through the Credit Bureau?
• My loan application was rejected owing to my poor credit record and this is shown in CCRIS. What can I do to improve my credit standing?
• If my credit application is denied by a financial institutions, does it mean that I am blacklisted?

Updating of Information

• If I were to settle my loan in full now, when will the record be updated?
• I have made full settlement for my loan account. Why is the record not updated by Bank Negara Malaysia?
• I am no longer an owner / partner of a business. However, the financial institution still reports me as the owner of the business. What shall I do?
• I am a foreigner working in Malaysia and I am applying for a credit card with one of the bank. However, I was told that there is another person who shares the ID which is similar to my passport number. Hence they are not able to proceed with my application for the credit card as it may involve fraudulent activities. How can I get this resolved?
• I have obtained my credit report and I have loan item that I want to be removed from the credit report because I am disputing the loan with the financial institution. I do not agree on the conduct of account reported as my non-payment is due to disagreement of the interest charges on my loan. How can I remove it?
• My bank told me that my name is in CTOS. How to update my record?
• I have been declared as bankrupt a few years ago and now I have fully settled the loan. Can Bank Negara Malaysia remove my name from bankruptcy status?
• I was a guarantor to somebody a few years ago. The person could not pay the loan and the loan has become defaulted. How to clear my name from blacklist

Others

• I have recently withdrawn from a partnership business. How can I avoid my name being used to apply for new loan application or as a guarantor for the business after I am no longer one of the partners?
• I am badly in debt and can no longer manage the payment of my existing loans. I wish to get my loans restructured. How can Bank Negara Malaysia assist me?
• Where can I get more information on CCRIS?

General

1. What is CCRIS?

CCRIS is a system that collects credit information on borrowers from financial institutions and supplies the information back to them. This is one of the sources of information used by financial institutions to help them establish a view of the credit histories of potential or current borrowers. It is not a blacklist system as perceived by some people.

2. What does CCRIS stand for?

CCRIS stands for Central Credit Reference Information System.

3. Why did Bank Negara Malaysia set up CCRIS?

One of the functions of Bank Negara Malaysia is to regulate and supervise the financial institutions so that the financial system of the country would be sound and stable. As such, the Bank promotes prudent credit policies and professionalism among the financial institutions, including the adoption of best business practices in credit risk management. One way of doing this is by providing CCRIS to the financial institutions so that they can make faster and better informed lending decisions.

4. What is the Credit Bureau of Bank Negara Malaysia?

The Credit Bureau is established by Bank Negara Malaysia under the Central Bank of Malaysia Act 2009 to administer CCRIS.

5. Is the Credit Bureau's activities regulated?

Yes, the Credit Bureau is required to operate within the limits set out under the Central Bank of Malaysia Act 2009.

6. Can I prevent the Credit Bureau from holding information on me?

No. The Credit Bureau is legally empowered to collect such information.

Obtaining the Credit Report

7. Does the law allow a person to have access to a credit report on himself or herself?

Yes. The Central Bank of Malaysia Act 2009 allows Bank Negara Malaysia to disclose credit information on a person to himself or herself for the purpose of verifying the accuracy of information reported in the credit report.

8. Is a financial institution allowed to access a credit report on a person who is not its customer/potential customer?

No. If a person unlawfully accesses a credit report, the person can be subject to severe penalties under the law.

9. The financial institution told me that I have a bad record in my credit report. Where can I find out the details of the record?

(1) If you are from the Klang Valley, you may obtain the credit report from the Customer Service Centre, Laman Informasi Nasihat dan Khidmat (BNMLINK) of Bank Negara Malaysia (BNM), Head Office at the following address:

BNMLINK
Laman Informasi Nasihat dan Khidmat (BNMLINK)
Ground Floor Block D
Bank Negara Malaysia
Jalan Dato' Onn
50480 Kuala Lumpur

BNMLINK operates daily from Monday to Friday, 9.00 am - 5.00 pm (including lunch time) except for public holidays.

Please bring along your MyKad or passport (for foreigner) and any other supporting documents that can verify your identity such as your driving licence, etc. The credit report will be given to you during the visit.

(2) If you are from Johor Bahru, Pulau Pinang, Kuala Terengganu, Kuching or Kota Kinabalu, you may also walk in to our Customer Service Centre at the respective branches for the report. Follows are the address of the Bank Negara Malaysia branches:

BNM Pulau Pinang
No.27 Lebuh Light
10200 Pulau Pinang
Telephone: 04 262 7125 / 7126 / 7127 / 7128 / 263 3371
Facsimile: 04 261 1223

BNM Johor Bahru
Jalan Bukit Timbalan
80000 Johor Bahru
Johor
Telephone: 07 224 0799 / 224 0792 / 224 0741 / 223 2798 / 223 2809
Facsimile: 07 223 6931

BNM Kuala Terengganu
Jalan Sultan Mohamad
21100 Kuala Terengganu
Terengganu
Telephone: 09 622 0571 / 0634 / 0644
Facsimile: 09 622 0516

BNM Kota Kinabalu
Jalan Lapan Belas
88000 Kota Kinabalu
Sabah
Telephone: 088 211 211 / 212 / 213 / 214 / 215 / 216
Facsimile:  088 219 464

BNM Kuching
Jalan Satok
93000 Kuching
Sarawak
Telephone: 082 252 311 / 230 969
Facsimile: 082 414 996

BNM branches operates daily from Monday to Friday, 9.00 am - 5.00 pm (close during lunch time from 1.00pm - 2.00pm except on Friday from 12.30pm - 2.30pm) except for public holidays.
(3) If you are from outside of the above locations mentioned, you may request your credit report via mail. Please complete and send us the following:

• Credit Report Request Form (CRR);
• Loan Declaration Form; (please download the above forms from website creditbureau.bnm.gov.my)
• A clear photocopy of your MyKad (both sides) / passport (for foreigners); and
• Any combination of two other documents (with your name and address stated clearly
  on each copy) from the following:
  • Driving licence;
  • Utility bills such as water bill, electricity bill, telephone bill, ASTRO bill, etc
• Bank account statement;
• Credit card statement; or
• EPF statement.

You can either post or fax the completed application form and the supporting documents to:

BNMTELELINK
Laman Informasi Nasihat dan Khidmat (BNMLINK)
Bank Negara Malaysia
Jalan Dato' Onn
P.O Box 10922
50929 Kuala Lumpur
Facsimile: +603 2174 1515

Please note that if you come personally to our LINK and branches to obtain the credit report, you will get the report instantly. However, it may take between 2 to 4 weeks to process your request for credit report via mail/fax as the report will be sent to the nearest financial institutions to your home address for your collection.

10. How often can I get my credit report?

You can obtain your credit report once in every three months.

11. Can I get CCRIS information over the phone from Bank Negara Malaysia?

No. We are not allowed to disclose CCRIS information over the phone since verification cannot be done.

12. Can I get my credit report from my bank?

No. You can only obtain your credit report from Bank Negara Malaysia.

13. Can I authorize someone to get my credit report from Bank Negara Malaysia?

No. The credit report can only be furnished to the person concerned.

14. I have a friend who needs to see his credit report. Can I get the credit report on his behalf?

No. A credit report can only be furnished to the person concerned.

15. I am going to be a guarantor of a loan. Can I get a copy of the credit report on the person whose loan that I guaranteed/will guarantee?

No. The credit report can only be furnished to the person concerned

16. I am a borrower. Can I get a copy of the credit report on my guarantor?

No. The credit report can only be furnished to the person concerned.

17. Can I obtain the credit report on behalf of my sick mother?

• a copy of identity card (MyKad) of the applicant;
• a copy of identity card (MyKad) of the authorised person (next-of-kin);
• latest reference letter and medical report verified by the doctor and hospital; and
• a copy of birth certificate / marriage certificate of the next-of-kin as proof of the
  relationship.
  

18. My friend's father had recently passed away. Can my friend obtain the credit report of his father?

The credit report shall be given only to the person who is legally authorized to administer the estate of the deceased as per Letter of Administration (LA). The request must strictly be submitted with a credit report request form supported with a copy of the following documents:

• a copy of death certificate;
• a copy of Letter of Administration; and
• a copy of identity card (MyKad) of the Administrator.
  

19. I am the director of the company and I would like to see the company's credit report, what is the procedure?

The request must be accompanied with a Credit Report Request Form supported with a copy of the following documents:

• a copy of identity card (MyKad) or passport (if you are a non-Malaysian) of the authorized person;
• an authorisation letter from the company (with company's letterhead) to authorise the person to collect the credit report. The letter should be signed by the company secretary and minimum two directors of the company;
• a dated certified true copy of Company Registration Certificate (Form 9) by company secretary;
• a dated certified true copy of Company Registration Certificate of Change Name of Company (Form 13) by company secretary, if applicable; and
• a dated certified true copy of latest List of Directorship of Company (Form 49) by company secretary

* Please take note that the authorization letter and certified true copies must be dated within 14 working days before the submission date of the credit report request form.

20. How much do I have to pay for a copy of credit report?

Currently, the credit report is free of charge from Bank Negara Malaysia.

Information in CCRIS

21. Where does the Credit Bureau get its information?

The Credit Bureau obtains the information from the participating financial institutions. This includes all licensed commercial banks, Islamic banks, investment banks, development banks, some of insurance companies, payment instrument issuers and rehabilitation institutions.

22. What kind of information do the financial institutions report to the Credit Bureau?

The financial institutions report essential identification data on their borrowers (e.g. name, identification number and date of birth) and provide the relevant data on the loans given to such borrowers (e.g. type of credit facilities, conduct of account and credit limit).

23. What are the types of credit facilities reported by the financial institutions to the Credit Bureau?

The financial institutions are required to report all types of credit facilities extended to their borrowers, including credit cards, overdrafts, trade facilities, housing loans, etc.

24. Can I have the history of all my borrowings from CCRIS?

Credit report only shows the outstanding or active accounts and credit applications for the last 12 months.

25. I am currently holding a credit card with a financial institution, is my information being captured in the CCRIS?

Yes. Credit card information is reported in CCRIS.

26. I have a current account with a financial institution, will this information be captured in the CCRIS?

Financial institutions are not required to and should not report any information on current accounts in CCRIS. However, if you have an overdraft facility operating in conjunction with the current account, information on the overdraft facility will be reported in CCRIS.

27. I have a current account without overdraft facility but I was informed by a financial institution that I have such facility. How could this record be reported to the CCRIS?

Any temporary shortfall in the current account (e.g. due to service charge imposed by the financial institution) will be treated as a temporary overdraft. The information will be reported to CCRIS until you have settled the shortfall. Once you have settled the outstanding amount, the record will no longer appear in you credit report.

28. I was informed by a financial institution that my loan account was in arrears. If I were to settle the amount overdue, will the record be removed from my name?

If you have settled the amount in arrears, your regularized account will be shown in the current month of your settlement. Nevertheless, the information on number of installment in arrears for last 12 months will be displayed in the credit report.

29. I noticed that one of my loans is reported under Special Attention Account. What is Special Attention Account?

Loans reported under Special attention Account are loans that are non performing loans that the financial institution has placed under special monitoring in view of recovering the loan or in the midst of collection. If you wish to know further details of the account, please contact the financial institution for further clarification.

Credit Facility/Financing Applications

30. If my credit application is turned down by one financial institution, will all the others do the same?

This is not necessarily the case. Different financial institutions have different lending policies depending on their risk appetites. The information provided by the Credit Bureau is only a part of the entire lending decision process in each individual financial institution and could be viewed differently by them.

31. Does Bank Negara Malaysia provide any credit rating on a credit applicant?

Bank Negara Malaysia does not provide any credit rating or opinion on the creditworthiness of any credit applicant.

32. Is Bank Negara Malaysia dictating the credit decisions of the financial institutions through the Credit Bureau?

No. Bank Negara Malaysia is not and would not be involved in any of the financial institution's lending decisions. The credit reports only provide factual information as reported to the Credit Bureau. Bank Negara Malaysia does not provide any opinion about the creditworthiness of a person. Financial institutions make their own decisions, using all the information they have available to them, including credit reports furnished by the Credit Bureau, information provided by the customer himself in credit application documents and other supporting documents.

33. My loan application was rejected owing to my poor credit record and this is shown in CCRIS. What can I do to improve my credit standing?

The adverse credit record could be due to an outstanding debt which you have with the financial institution which you either did not repay or did not repay on time. You should discuss the matter with the financial institution concerned and work out a repayment scheme with the financial institution. Once your account has been regularized, your credit record will reflect the improved position.

34. If my credit application is denied by a financial institutions, does it mean that I am blacklisted?

No. Bank Negara Malaysia does not blacklist anyone as it does not express any opinion about the information in the credit report. Information on rejected credit applications is not provided in credit reports in order to ensure that a financial institution will not be prejudiced by the decision of another financial institution.

In processing loan application, the financial institution will perform a credit assessment on the borrower. This may involve background checks from various sources, among others, are the information supplied by credit reference agencies such as CTOS Sdn Bhd (CTOS), Financial Information Services Sdn Bhd (FIS), RAM Credit Information Sdn Bhd (RAM). The information provided by the credit reference agencies will help financial institutions in their evaluation process. The financial institutions need to use all available data to help them make good decisions and be prudent in their loans and advances.

Updating of Information

35. If I were to settle my loan in full now, when will the record be updated?

The record will be updated by the reporting financial institution in the next reporting date, i.e. not later than 15th of the following month.

36. I have made full settlement for my loan account. Why is the record not updated by Bank Negara Malaysia?

Bank Negara Malaysia only collects credit information from the financial institutions and not in the position to update any records. The reporting financial institution is responsible to update the record. If you notice that the loan account has not been updated, kindly refer the matter to the said financial institution.

37. I am no longer an owner / partner of a business. However, the financial institution still reports me as the owner of the business. What shall I do?

Once you are no longer an owner / partner of your business, you have to update your ownership status with the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia). If in the agreement of transferred ownership or agreement made with the other partners upon pulling out from the business states that you are no longer liable for the loan, you should approach the financial institutions where the business has borrowings to update the record in order to release yourself from the liabilities. If you have stood guarantee for the loan and no agreement has been made to transfer the liabilities, you will remain liable for the loan.

38. I am a foreigner working in Malaysia and I am applying for a credit card with one of the bank. However, I was told that there is another person who shares the ID which is similar to my passport number. Hence they are not able to proceed with my application for the credit card as it may involve fraudulent activities. How can I get this resolved?

As foreign passport number is not unique, the ID number assigned to a Malaysian may coincide with your passport number. This does not necessarily mean that it involves fraud. For this situation, please inform the processing officer of the bank (that you are applying for the credit card) to call Bank Negara Malaysia to resolve the matter, or you may provide us with the details of the officer in order for us to follow up with him further.

39. I have obtained my credit report and I have loan item that I want to be removed from the credit report because I am disputing the loan with the financial institution. I do not agree on the conduct of account reported as my non-payment is due to disagreement of the interest charges on my loan. How can I remove it?

The loan item cannot be removed from your credit report as it is still outstanding loan with the financial institution. However, pending the outcome of the dispute we can provide you the option of tagging your report as special name. This would mean that when your loan application is being processed by the financial institution, they have to request for your credit report from Bank Negara Malaysia. When your credit report is provided to the financial institution concern, we will attach your remarks and chronology of events pertaining to the disputed case. Please be cautioned that with the additional information provided, the decision to approve or reject your loan still lies at the discretion of the financial institution that is processing your loan.

40. My bank told me that my name is in CTOS. How to update my record?

CTOS Sdn Bhd (CTOS) is a private credit reference agency and not related to Bank Negara Malaysia. You may contact CTOS at 03-27708833 for further information.

41. I have been declared as bankrupt a few years ago and now I have fully settled the loan. Can Bank Negara Malaysia remove my name from bankruptcy status?

No. You have to liaise with Insolvency Department at 03-88851000 on your status of bankruptcy.

42. I was a guarantor to somebody a few years ago. The person could not pay the loan and the loan has become defaulted. How to clear my name from blacklist

Bank Negara Malaysia does not have blacklist system. A guarantee is a legal contract that binds you to pay the debt of the borrower if the borrower fails to do so. The extent of the liability of a guarantor will be as specified in the guarantee document and you will be held liable for the liabilities in accordance with the terms of the guarantee document. You are advised to seek clarification or explanation from the concerned financial institution to resolve the issue.

Others

43. I have recently withdrawn from a partnership business. How can I avoid my name being used to apply for new loan application or as a guarantor for the business after I am no longer one of the partners?

You are advised to check with Companies Commission of Malaysia to ensure that your name as one of the partners and other related information being updated accordingly.

44. I am badly in debt and can no longer manage the payment of my existing loans. I wish to get my loans restructured. How can Bank Negara Malaysia assist me?

You may seek the assistance of Agensi Kaunseling dan Pengurusan Kredit (AKPK) at 1-800-88-2575. AKPK is an agency set up by Bank Negara Malaysia to provide financial management, credit counseling, financial education and debt restructuring services for individuals.

45. Where can I get more information on CCRIS?

Please visit credit bureau website at http://creditbureau.bnm.gov.my/ or contact BNMTELELINK at 1-300-88-5465.

1. Why does Bank Negara Malaysia produce Commemorative Coins to the public?
2. What are the standard terms and conditions for purchasing the Commemorative Coins?
3. Is there any limit as to how many Commemorative Coins can be purchased at any one time?
4. What forms of payment do you accept?
5. Where can I purchase the Commemorative Coins?
6. If an item is out of stock, does that mean it is no longer available?
7. What is the refund/return policy?
8. Does Bank Negara Malaysia 'buy back' Commemorative Coins?
9. Where should I redirect a complaint or dispute regarding the purchase of Commemorative Coins?

1. Why does Bank Negara Malaysia produce Commemorative Coins to the public?

A commemorative coin is a legal tender coin issued by the Bank to commemorate a specific and significant occasion, outstanding person or place or to mark the anniversary of an historic event.

2. What are the standard terms and conditions for purchasing the Commemorative Coins?

Our standard Terms and Conditions are:

• All sales of Commemorative Coins are subject to availability, on first come first serve basis.
• Currently, the Commemorative Coins can only be purchased at BNMLINK at BNM Head office in Kuala Lumpur
• Payment is by cash only.
• No refunds for any purchase of Commemorative Coins.

3. Is there any limit as to how many Commemorative Coins can be purchased at any one time?

There is no limit set for each purchase - subject to availability.

4. What forms of payment do you accept?

Currently, we only accept cash as the mode of payment.

5. Where can I purchase the Commemorative Coins?

The Commemorative Coins are available for purchase from our counter located at:

BNNMLINK (Laman Informasi Nasihat & Khidmat)
Ground Floor, Block D
Bank Negara Malaysia
Jalan Dato' Onn
50480 Kuala Lumpur
MALAYSIA

Tel : +603 2698 8044 / 9044 (ext: 7417 / 7390)

6. If an item is out of stock, does that mean it is no longer available?

Yes. Commemorative Coins are minted in limited quantities. Thus, if a particular series is out of stock, it is no longer available for sale from our counter.

7. What is the refund/return policy?

The purchase of a Commemorative Coin is made only after the buyer has agreed with the quality of the coins and all sales are final. The Bank does not offer any refund for all Commemorative Coins purchases. However, the Bank will pay the face value of any Commemorative Coins that are surrendered back to us.

8. Does Bank Negara Malaysia 'buy back' Commemorative Coins?

Commemorative Coins surrendered back to Bank Negara Malaysia in good conditions are only paid on the face value of the coins and not the purchase price.

For example, a buyer purchased a Commemorative Coin with a face value of RM10.00 for a purchase price of RM300.00. The Bank will pay the face value, which is RM10.00, if the coin is surrendered.

9.Where should I redirect a complaint or dispute regarding the purchase of Commemorative Coins?

All complaints must be submitted directly to:

BNNMTELELINK (Pusat Perhubungan Pelanggan)
Ground Floor, Block D
Bank Negara Malaysia
Jalan Dato' Onn
50480 Kuala Lumpur
MALAYSIA

Tel : +603 2698 8044 / 9044 (ext: 7417 /7390)
e-mail : bnmtelelink@bnm.gov.my

1. What are the types of investments and financial fraud activities that come under Bank Negara Malaysia's jurisdiction?
   
   
2. What are the risks involved in participating in these illegal schemes?
   
   
3. Where can I find the list of licensed institutions?
   
   
4. Any pointers to the general public on how to detect an illegal scheme?
   
   
5. What should you do if you're a victim of these schemes?
   
   

1. What are the types of investments and financial fraud activities that come under Bank Negara Malaysia's jurisdiction?

• Under Bank Negara Malaysia's jurisdiction, the activities include illegal deposit taking, illegal foreign currency dealings, illegal remittances, illegal insurance business and illegal money changing business.
• Other fraudulent activities related to Bank Negara Malaysia but, are usually referred to and handled by the police are: cheating (related to financial matters), forged currency notes, forged insurance cover notes, credit card frauds and Internet frauds such as bogus websites or ‘phishing' scams.

2. What are the risks involved in participating in these illegal schemes?

• In most cases, the victims of these schemes would have lost their money as they may have used their life savings or obtained loans from banks or cooperatives.
• Those who actually make a "profit" at an earlier stage of the scheme is advised to re-invest their gain. Ultimately, their investment will vaporise.
• These people who are cheated would become a burden and cause grief to themselves and their family members.
• These people may also incur additional costs as they may have to employ lawyers to bring a civil suit against the perpetrators.
• Those who had acted as middle men or agents would run the risk of themselves or their family members being threatened or face physical harm if the scheme fails.

3. Where can I find the list of licensed institutions?

• The list of institutions that are allowed to accept deposits, to perform foreign currencies trading and to do remittance can be referred to our official Bank Negara Malaysia's website.

4. Any pointers to the general public on how to detect an illegal scheme?

Members of the public are advised to be careful and not fall prey to these schemes. Be careful if these operators approach you with the following proposals:

• The approach may have been by mail, telephone, Internet or in person, but the intention is always the same, that is, to take money from unsuspecting victim for goods or services that they have no intention to provide.
• Schemes which promise interest rates, returns or profits, which are much higher than the returns offered by licensed financial institutions for their deposits.
• The promises of high returns are aimed at attracting the public to participate in the schemes and the investors may not be given any copies of the complete agreements by the company.
• There is also no assurance that the operators of such schemes can continue to pay the high returns.
• At the beginning of such schemes, the operators are able to use money received from subsequent depositors to pay high returns or to repay the principal amount to earlier depositors.
• However, the operators cannot invest the deposits in equally or more lucrative ventures or investments and therefore cannot sustain the high returns or repayment promised to their depositors.
• Please note that these schemes will fail if there are no new deposits being continually received by the operators. At that time, such "get- rich-quick" schemes will collapse and the depositors or investors will lose their investments.

5. What should you do if you're a victim of these schemes?

• Members of the public are advised to be careful and not to fall prey to the above mentioned schemes. If members of the public have fallen victim to any of these illegal schemes, Bank Negara Malaysia advises them to do the following:
• Firstly, they are advised to lodge a police report.
• Then, to report to the relevant enforcement agency.
• Members of the public must keep all the related documentations of all their investments such as bank-in slips, deposit slips, agreements, vouchers that they received from the company or perpetrator so that they can use the documents to take action against the company.
• This includes the details of the officers or key persons in the company. This information could prove useful for enforcement purposes.

PARTS

1. What is a "Get-Rich-Quick" scheme?
2. How To Spot The Scams?
3. How To Protect Yourself From The Scams?
4. What You Should Do If You Are a Victim of the Scams

1. What is a "Get-Rich-Quick" scheme?
   A plan which offers high or unrealistic rates of return for a small investment while at the same time promising that such investment is easy and risk -free.
   
   The following "Get-Rich-Quick" schemes are prohibited under the legislation administered by Bank Negara Malaysia :
   

   Illegal Deposit Taking Activities
   
   Illegal deposit taking is an act of receiving, taking or accepting of deposits (moneys, precious metal, precious stone, any other article etc.) from members of the public that promises a repayment with interest or returns in money or money's worth without a valid licence under the Banking and Financial Institutions Act 1989 (BAFIA).
   

   Illegal Foreign Currency Dealings
   
   The following acts tantamount to illegal foreign currency dealings:

   • Buying or selling of foreign currency by a person who is not an authorized dealer unless such person has obtained the permission of the Controller of Foreign Exchange under the Exchange Control Act 1953 (ECA).
     
     
   • Buying or selling of foreign currency by a resident who is not an authorised dealer, with a person outside Malaysia except if the resident has obtained the permission of the Controller of Foreign Exchange under the ECA.
     
     

CAUTION: Internet Investment Schemes Members of the public are cautioned to be on guard against some investment schemes promoted on the internet as these schemes are not licensed or authorized by Bank Negara Malaysia to accept deposits or deal in foreign currency. Such schemes often come in the guise of attractive investment returns or opportunities involving unrealistic rates of returns with zero to low risk. Investors are reminded that they should only place deposits with >institutions licensed or deal in foreign currency with >institutions authorised by the Bank. Unlicensed operators may cease operating their business resulting in the investors with no means to recover their investments or seek redress against the persons connected with the scheme.




2. How To Spot The Scams?
   

   Illegal deposit taking scam

   • The person (an individual, a company or an organisation) receives, takes or accepts deposits from members of the public and is not licensed under section 6(4) of the BAFIA;
     
   • The person promises to repay the deposit, with or without interest or returns, over a period of time in the form of money or money's worth, etc.; and
     
   • The person promises to repay the initial deposit upon demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it, with any consideration in money or money's worth (the repayment of initial deposit is sometimes included in the fixed interest or returns promised).
     
     

Warning Signs for Investors •  Illegal deposit taking activities have been disguised and camouflaged in various forms to deceive the public to fall victim to the investment scams, by giving valuable goods as part of the promised returns and camouflaging the deposits as loans to the company; •  Illegal deposit taking activities appear to be able to provide high or unrealistic rates of interest or return over a short period of time as compared to licensed institutions. However, these schemes will not last long; •  The survival of this scheme is dependent upon the recruitment of new depositors, i.e., new funds obtained will be used in paying dividends to the existing depositors. Therefore , the scheme will fail when there is no contribution of funds from new depositors; and •  Initially the depositors may be paid their promised returns. However, the operator would eventually abscond with the moneys collected when he feels that the scheme is about to fail, thus leaving the depositors at the losing end.

Illegal foreign currency scam

Foreign currency dealings with a person, other than an authorized dealer, who has not obtained the permission of the Controller of Foreign Exchange under the ECA, often:

• Offer investors or members of the public the opportunity to deal in foreign currencies with a principal company (purported to have a valid licence to trade foreign currencies overseas);
  
• Facilitate the trading of foreign currencies by providing access to the principal company's website and trading facilities via internet;
  
• Recruit fresh graduates as marketing executives and allure them to get their family members to invest;
  
• Instruct the investors to deposit the investment moneys into either the principal company's bank account or a third party bank account; and
  
• Induce the investors to top up their investment ("margin call") or otherwise risk losing their investment.
  
  

Warning Signs For Investors Illegal operators of foreign currency scams will try to entice potential investors with a marketing strategy which promises quick and high returns - •  By projecting a professional and reputable image with smart-looking employees, a high-tech office layout and advanced IT facilities where investors are induced to operate their accounts via the internet; •  With tools of the trade, e.g., a news screen showing movements in exchange rates, to give the impression that a professional and legitimate business is being conducted; and •  A business contract is usually entered into between the investors and the company. Such contracts are usually left unsigned by the company. This means no action can be taken by the investors against the company as there is no binding written contract.




3. How To Protect Yourself From The Scams?
   
   
• Remember the golden rule - if it sounds too good to be true, it's probably a lie;
• Deal only with >licensed financial institutions and authorized dealers;
• Check with the relevant authority before investing;
• Don't be pressured or rushed to invest;
• Be extra careful with investments over the internet;
• Be skeptical of any investment opportunity that is not in writing; and
• In case an investment has been made, keep copies of all the investment and communications.
  
  
4. What Should You Do If You Are a Victim of such Scams?
   
   If you have any information pertaining to illegal deposit taking activities or illegal foreign currency dealings or are a victim of such activities or scams you can send details of such information or complaint together with the documents to Bank Negara Malaysia as follows:

Address:

Unit Penyiasatan Khas
Bank Negara Malaysia
Jalan Dato' Onn
50480 Kuala Lumpur
Fax: 03-26987467
E-mail: upkinfo@bnm.gov.my

We can also be contacted at the following telephone numbers:

Tel.: 03-2698 5708 / 2698 5724 / 2698 5776 / 2698 5785 / 2698 4163 / 2691 0824 / 2692 6482 / 2694 2143

1. What is Cheque Truncation and Conversion?
   
   In cheque truncation, the clearing of cheques will be based on the image and Magnetic Ink Character Recognition (MICR) Codeline data of the cheque and not the physical cheque. In place of the physical cheque, the image and data of the cheque such as the MICR fields, date of presentation, presenting bank, etc. would be transmitted electronically throughout the clearing process. Thus, the need to move the physical cheque from the collecting bank to the Clearing House and the paying/drawee bank will not be necessary. This would effectively reduce the time required for payment of cheques, except in exceptional circumstances. To date, cheque truncation has been implemented in several countries including the US, Hong Kong, Singapore and Sri Lanka.
   
   Cheque conversion, on the other hand, is a data-based cheque clearing system, where the clearing will be based solely on the MICR Code line data of the cheque and not the image or physical cheque. The MICR Codeline data captured is then converted into a payment instruction to effect the transfer of funds from the drawer's account into the drawee's account.
   
   Benefits and Impact to Public
   
   

2. How would bank customers benefit from the implementation of CTCS?
   • Greater efficiency of cheque clearing process
   • Timely availability of funds to beneficiaries
   • Improved cash-flow management
   • Improved level of service due to extended cut-off time to deposit cheques
   • No additional cost to customers
   • Inland Exchange commision will not apply because all cheques will be treated as local cheques
   • Fate of cheque will be known on the following working day

3. Would the new system impact the current mode of issue and deposit of cheques by customers?
   
   No, except that the pay-in slip as no longer be necessary. However, the depositor has to complete the pay-in details on the reverse of the cheque. Customers are advised to write cheques with a dark coloured ink (blue or black ink is recommended). This would enhance the quality of the image of the cheque captured. Further, for representment of unpaid/returned cheques, an Image Return Document (IRD) will be used in place of the original cheques. In addition, beneficiaries of outstation cheques will be able to use the funds within a shorter period of time, compared to the current dayhold of 5 to 8 working days.
   
   
4. What should members of public do if he/she receives a non CTCS designed cheque?
   
   Such cheques will continue to be acceptable and chops are allowed until they are phased out or until such time as may be announced by Bank Negara Malaysia . After the cut-off date , he/she should request for a new CTCS-compliant cheque from the drawer. The banks have, since 1 July 2007, been issuing only the new designed cheques to accountholders.
   
   
5. What happens to old designed cheques after the cut-off date?
   
   The customers should request the issuer to replace them with new designed cheques. Issuers may exchange them for the new designed cheques with their banks.
   
   
6. Will the cut-off times for deposit of cheques be standardised under the CTCS environment?
   
   One of the key objectives of CTCS is to achieve same day clearing . Therefore, under the CTCS environment, it is envisaged that all cheques deposited within the normal banking hours, irrespective of the branch of deposit, will be cleared on the same business day. The clearing cycle would be shortened and it would be possible for customers to realize the proceeds of cheques earlier. However, the cutoff time would depend on the service levels of the individual banks.
   
   
7. Can a customer alter a cheque?
   
   To protect the interest of the accountholder and to mitigate against fraud, no alteration is allowed and such cheque will not be accepted.
   
   
8. Are there any changes to the current cheque clearing times?
   
   There are no changes to the current clearing times. Cheques deposited before the cut-off time that are specified by the individual banks will continue to be cleared within the same day.
   
   
9. Banks charge inland exchange commission for outstation cheques. Would this practice be continued under CTCS?
   
   All cheques, irrespective of the point of deposit or "drawee town", will be treated as local cheques. As such, inland exchange commission will no longer be applicable .
   
   Image Return Document (IRD)
   
   
10. What is an Image Return Documents (IRD)?
    
    In the CTCS environment, the physical cheques will be retained by the collecting banks and not returned to the depositor. IRD is a document produced by the collecting bank to substitute for the returned cheque. IRD is a legally recognized substitute of the original cheque for re-presentment purpose. The document is recognized under the Bills of Exchange Act 1949. A specimen IRD is attached.
    
    
11. Would dishonoured cheques be returned to the accountholders?
    
    No, an Image Return Document (IRD) or Cheque Return Advice for non-representable items (example due to "words and figures differ") will be issued to drawees, when a cheque is returned unpaid. The IRD serves as a notice of dishonour that the cheque cannot be paid for various reasons and replaces the original cheque for the purpose of re-presentment, where applicable, for clearing under CTCS. It is a legal document in place of the original cheque for representment purposes. The IRD may only be deposited into the bank (or any of its branches nationwide), where the cheque was originally deposited and into the same account. Representment is only permitted for the following return reasons:-
    • Refer to Drawer
    • Exceeded Arrangement / Amount Limit Exceeded
    • Effects Not Cleared
    • Not Arranged For
    • Other Reason (for insufficient funds)
    • Post Dated
    • Cleared In Error
    • Large Value Confirmation required

12. Why can't the banks return the original unpaid cheque?
    
    CTCS uses electronic image and data for clearing of the cheques. The physical cheque is removed from the clearing process once it is presented for payment/collection. The Bills of Exchange Act 1949 has been amended to accord legal status to the Image Return Document (IRD), which will be issued in place of the returned cheque, for representment purposes.
    
    
13. Can the drawee request for the original cheque instead of IRD?
    
    Yes, but he/she needs to surrender the IRD in exchange for the original cheque. A fee may be imposed by the bank concerned for the retrieval of the cheque based on cost recovery.
    
    
14. Can a drawer request for a copy of a paid cheque? If yes, how?
    
    The physical cheques will be retained by the Collecting bank for one year. Drawer may request the original through his/her bank.
    
    
15. Who will issue the Image Return Document (IRD) for the customers?
    
    The collecting bank, where the cheque was deposited, will issue the IRD.
    
    
16. What is the validity period of an IRD?
    
    The validity period for an IRD, as in the case of the original cheques, shall be six months from the date of the original cheque.
    
    
17. What must I do if an IRD cannot be presented?
    
    You should return the IRD to the drawer in exchange for a new replacement cheque. The replacement cheque should address the reasons for the return of the IRD in order that it may be cleared successfully through CTCS.
    
    
18. What should I do if I have lost the IRD?
    
    As an IRD is a substitute of a dishonoured cheque, the lost IRD will be regarded as a lost cheque. The drawee should request for another cheque from the drawer in such circumstances. On the other hand, the drawer of the cheque should also place a 'Stop Cheque' instruction on the lost IRD.
    
    
19. Can I present an IRD to a bank for cash payment over the counter?
    
    An IRD can only be presented for clearing and not for encashment.
    
    
20. Are there any charges imposed on the depositor when the bank issues an IRD?
    
    No, other then the usual returned cheque charges, which will be imposed on the issuer/drawer, there will be no additional charges as the IRD is a replacement of the returned cheque.
    
    
21. If I present an IRD and it is returned, will I get back the same IRD again?
    
    No, a new IRD will be generated for each return of the same cheque. Therefore, if an IRD is presented and subsequently returned, another IRD will be generated stating clearly that it is the second IRD.
    
    
22. Why is the cheque return (for representable items) effected through the IRD? What is the purpose of the IRD?
    
    The IRD offers the following benefits over the usual return cheque process.
    • The IRD conveniently contains, in one document, the following information:-
    • the reason for its return
    • that it can be represented
    • the validity period for its representment
    • the number of times the cheque has been represented
    • The IRD is also more secure as alterations are not allowed, thereby eliminating the possibility of unauthorized alterations.

23. How should one present an IRD?
    
    You can present the IRD over the counter or deposit it into the Cheque Deposit Machine/Box at any branch of the bank that you originally deposited the cheque.
    
    
24. Can an IRD that is mutilated, altered or torn be represented?
    
    No. As an IRD is a substitute for a dishonoured cheque, the mutilated or torn IRD will be regarded as a mutilated or torn cheque. Similarly, alteration is not allowed on the IRD as an altered IRD will not correspond to the stored cheque's image in the CTCS. The customer should request for a replacement cheque from the drawer in the above circumstances.
    
    
25. How can I ensure that the IRD is genuine?
    
    The front and back image of the original cheque will be printed on the IRD, which itself will be printed on security paper. Each IRD will also have a serial number and controlled strictly by the bank that issued the IRD.
    
    The Collecting bank (or the bank that issued the IRD) will also have to ensure that adequate security and internal controls are in place to protect it against fraud. Alterations on the IRD are not allowed. If the IRD is tempered with, the collecting bank will return it unpaid.
    
    Rubber Stamp, Chop and Personal Seal
    
    
26. Will a cheque affixed with rubber-stamp, chop and personal seal be accepted for clearing under CTCS? If not, why?
    
    No. Company stamp/seal/chop on the new design cheque is deemed unnecessary as details of the drawer are preprinted on such cheques. The preprinted name of the company and registration number on the cheque complies with the requirements of the Companies Act 1965.
    
    With CTCS, verification and authorization by the paying banks will be based on the image and data of the cheque. Hence, it is of utmost importance that legible images are available to the paying banks. The use of company stamp, chop and personal seal shall be discontinued as the ink may penetrate the paper or interfere with the legibility of the information, either printed or written, on the cheque or any reproduction of it through imaging. The use of company stamp, etc. may overshadow the clear appearance of the basic features of the cheque in the image. Therefore, companies that use the existing blank cheques would need to exchange such cheques with the newly designed cheques immediately.
    
    Cheques Clearing Outside Klang Valley
    
    
27. What happens to the existing manual clearing of local cheques in the East Coast, Sabah and Sarawak under the CTCS Environment?
    
    All cheques, whether local or outstation, including those in the East Coast, Sabah and Sarawak , will be cleared centrally under CTCS.
    
    
28. Will cheques be cleared regionally e.g. Kuala Lumpur , Pulau Pinang and Johor Bahru under CTCS?
    
    No, all cheques will be cleared centrally in Kuala Lumpur.
    
    Others
    
    
29. Why is there a need to change the cheque design under CTCS?
    
    The cheque size has been standardised to 3.5" x 7" to facilitate cheque truncation. A single cheque size would assist the commercial banks with automation of the clearing process, besides maintaining an acceptable file size for electronic transmission of the cheque images and data. Boxes for the date and amount (in figures) have been introduced to facilitate optical capture in the future. Besides, customers need not complete pay-in slips, when depositing the cheques. Security features have also been enhanced to combat fraud.
    
    
30. We currently have cheques, which are completed on computer printers using magnetic ink for the printing. Can we continue to use magnetic ink for the printing?
    
    You may continue to use magnetic ink for printing of cheques, provided it does not impinge on the clear band area or affect the scanning/imaging/processing of the cheques nor affect any material part i.e date, payee name, amount in words and numericals and signature on the cheque.
    
    
31. What measures are in place to reduce cheque fraud?
    
    Security is of paramount importance in the CTCS and the banking industry. As such, several security measures have been put in place to ensure the safety and security of cheques cleared under CTCS. These include security features on the physical cheques, implementation of digital signature to ensure that all information are digitally signed and transmission of image and data via a secured network.
    
    
    Migration to e-payments
    
    
32. BNM is actively promoting the migration to e-payment agenda. Since cheques are paper-based, why is BNM making the paper-based payment instruments more efficient?
    
    While there has been a shift in the payment mode from cheques to more electronic payments in the recent years, cheques still account for a significant portion of non-cash retail transactions, at 93% in 2007. Hence, enhancing the efficiency of cheque clearing is still an important area of focus for BNM in efforts to lower the cost of doing business. Besides, the experience in the United States has shown that cheque conversion is a necessary prelude to transforming such paper-based payment modes into e-payments.

Bank Negara Malaysia
8 April 2008