On 23 July 2026, Bank Negara Malaysia (BNM) imposed an administrative monetary penalty (AMP)^[1] of RM6,900 on SMJ Teratai Sdn. Bhd. (SMJ Teratai) for failure to comply with customer due diligence (CDD) requirement.^[2]

As a reporting institution (RI), SMJ Teratai is required to conduct CDD on its customers.^[3] The requirement to conduct CDD is intended to enable RIs to assess their exposure to money laundering (ML) and terrorism financing (TF) risks, as well as to mitigate the risk of RIs being used as channels for ML/TF, and other criminal activities.

BNM discovered the breaches following a supervisory examination on SMJ Teratai. During the examination, it was found that SMJ Teratai had failed to conduct CDD on a customer for money-changing transactions due to lack of reasonable care in implementing the CDD requirement by its staff.

SMJ Teratai has since taken remedial measures by conducting staff retraining, enhancing its standard operating procedures, and strengthening its governance framework and internal controls.

In deciding the AMP to be imposed, relevant aggravating and mitigating factors were considered. These include the severity of the breaches and SMJ Teratai’s:

1. current controls to ensure compliance with CDD requirements;
2. past compliance record; and
3. post-misconduct behaviour, including the effectiveness of remedial actions to prevent recurrence of the breaches.

On 5 August 2026, SMJ Teratai paid RM6,900 for the AMP imposed by BNM.

BNM requires all RIs to maintain a high level of commitment in ensuring compliance with anti-money laundering and countering financing of terrorism and countering proliferation financing (AML/CFT/CPF) requirements. BNM will not hesitate to take appropriate supervisory and/or enforcement actions should any RI fail to meet legal and/or regulatory requirements.

The enforcement action taken against SMJ Teratai is in line with the approach and processes outlined in BNM’s published Enforcement Approach.

^{[1] BNM imposed the AMP pursuant to section 75(2)(b) of the Money Services Business Act 2011 (MSBA).} 

^{[2] This requirement is set out under section 74(3) of the MSBA, read together with paragraph 14C.10.6 of the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT and TFS for FIs PD).}

^{Note: The AML/CFT and TFS for FIs PD was in effect from 1 January 2020 to 5 February 2024 and has since been superseded by the Anti-Money Laundering, Countering Financing of Terrorism, Countering Proliferation Financing and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT/CPF and TFS for FIs PD), which took effect on 6 February 2024. The requirement is preserved under paragraph 14C.10.6 of the AML/CFT/CPF and TFS for FIs PD.} 

^{[3] When conducting CDD, RIs are required to identify and verify the person authorised to represent a company by means of a letter of authority or director’s resolution in conducting the CDD.}