Bank Negara Malaysia (BNM) has imposed a compound fine of RM1.025 million on KAF Investment Bank Bhd for violating the foreign exchange policy (FEP) regulations under the Financial Services Act 2013 (FSA).
The enforcement action was taken after KAF Investment Bank failed to obtain BNM approval for foreign currency transactions involving resident individuals, particularly when domestic ringgit loans exceeded the permitted limit.
The violation occurred under Section 214(9) of the FSA.
In addition, the investigation also found that the bank's internal controls were inadequate to ensure compliance with the FEP Notice as stipulated under Section 214(6) of the FSA.
Since then, KAF Investment Bank has implemented remedial actions by introducing new internal policies and procedures to strengthen compliance with financial regulations. The compound was paid on 29 January 2026.
BNM stressed that in determining the amount of compound, it took into account aggravating and mitigating factors, including the bank's previous compliance record and corrective measures implemented.
The central bank also reminded that financial institutions must fully comply with the requirements of the FEP, including obtaining written approval for certain foreign exchange transactions to avoid future enforcement actions.
