AmBank Group to pay RM53.7m penalty to Bank Negara Malaysia

PETALING JAYA: AMMB Holdings Bhd (AmBank Group) has agreed to pay a penalty of RM53.7 million to Bank Negara Malaysia (BNM) for non-compliance by its consumer banking and Islamic banking units.
The nature of non-compliance was not revealed.
"The penalty pertains to action pursuant to section 234 of the Financial Services Act 2013 and section 245 of the Islamic Financial Services Act 2013 with respect to non-compliance with certain regulations by AmBank (M) Bhd and AmBank Islamic Bhd, respectively," it said in a filing with Bursa Malaysia yesterday.
The two sections allow for the imposition of monetary penalties for any failure to comply with the Act, directions or regulations.
The group said it began its own review and has been co-operating with BNM with regard to the matter, including providing information to the central bank. "This review has led to the strengthening of our governance structure and is ongoing. The penalty has no material impact on AmBank Group's earnings for the financial year 2016."
In addition to the penalty, the group has agreed with BNM to work on a four-year programme towards achieving market best practices.
"Moving forward, we have agreed with BNM that we will set aside an average of RM25 million per annum for four years for investment in systems, infrastructure and training.
"This series of measures will further enhance the robustness of our processes, reporting, improve our governance structure as well as safeguard against such circumstances recurring in the future and ensure that AmBank Group is well placed for future growth."
Earlier this year, AmBank was thrown into the limelight for purportedly being the bank in which Prime Minister Datuk Seri Najib Abdul Razak had received RM2.6 billion, which he has since said were political donations.