Please visit our Monetary Stability page for the FAQ.

Please visit our Ringgit Exchange Rate Policy page for the FAQ.

Money Services Business - Frequently Asked Questions (FAQs)

Introduction

Frequently Asked Questions (FAQ) on matters related to money services business (MSB) namely money changing, remittance, and wholesale currency business under the Money Services Business Act 2011 (MSBA). 

1. Who can apply for a money services business licence?

Only a company incorporated under the Companies Act 2016 or any corresponding previous written law is allowed to apply for a licence. Any application from an individual, sole proprietorship or partnership will not be considered.

2. My company is interested to apply for a money services business licence. Where can I get more information on the procedures, requirements, or main considerations for licence approval?

To apply a new money services business licence, you may refer to the FAQs published on BNM website in the link below:    /documents/20124/53367/FAQs_MSB

3. How can I verify if a money services business company is licensed?

A list of licensed money services business companies and approved money services business agents is published on BNM website. It will be updated periodically.

Please refer to this link for the full list:

/existing-regulatees

4. Where can I find all the laws and regulations relating to money services business?

The Money Services Business Act 2011 and all other relevant regulations and guidelines are published on BNM website.

Please refer to this link below for more information: /legislation-guidelines

5. Is there any restriction on foreign shareholding for money services business in Malaysia?

There is no specific requirement on shareholding by any local or foreign company, however, this is subject to assessment by BNM.

All shareholders should fulfil the minimum criteria of a “fit and proper” person. All money services business licensees are required to obtain a written approval from BNM for any new substantial shareholder, i.e. those with a shareholding of 5% or more.

Please refer to section 32 of the MSBA for more details on shareholders by following the link below:
/legislation-guidelines

6. What are the different classes of money services business licence and what do they mean?

As per the First Schedule of Money Services Business (Licensing) Regulations 2012, the classes of licence indicate the type of money services business allowed to be conducted, as follows:

7. Is there any other option to conduct money services business without the need to obtain a licence from BNM?

A person may conduct money services business without the need for a licence if it is appointed as a money services business agent by an approved principal licensee. In order to do so, the person may work directly with an existing licensee, particularly those who has been approved by BNM to appoint agents under section 43 of the MSBA.

The list of approved principal licensees can be viewed at the link below:

static/file/Organisation-Structure-202310.pdf

Note:

Under the MSBA, only a company incorporated under the Companies Act 2016 or any corresponding previous written law is allowed to be appointed as money services business agent. The principal licensee is required to obtain BNM's approval for the appointment of money services business agents. In general, the principal licensee will provide the money services business system, relevant standard operating procedures, and appropriate training on the money services business to its appointed money services business agent.

8. Where can I submit any information or report on illegal money services business?

You may submit information or report on any illegal money services business to BNM’s Customer Contact Centre. Please refer to the link below for contact information:

/contact-us

Please visit the following pages for more information:

• Financial Advisers & Islamic Financial Advisers 
• Insurance and Takaful Brokers
• Adjusters

PARTS

1. SME Loans / Financing

A.Pembiayaan Mikro

B.Micro Enterprise Fund (MEF)

C.ABM Partner initiative

D.SME Loan / Financing Rejection

2. Credit Bureau

A.Difference Between Central Credit Reference Information System (CCRIS) and other credit bureaus (Credit Bureau Malaysia & CTOS)

3. Avenues for Redress

A.Small Debt Resolution Schemes (SDRS)

B.Making a Complaint Against Banking Institutions

PART 1: SME Loans / Financing

A.Pembiayaan Mikro

i.What is microfinancing (Pembiayaan Mikro)?

• Microfinancing is small business loans up to RM50,000 for micro enterprises and self employed individuals. Microfinancing is meant for business financing only, such as for working capital and for capital expenditure. It is not a personal loan.

ii.Who is eligible for microfinancing?

• All micro enterprises and self employed individuals with viable businesses.
• Microfinancing is available to businesses in all economic sectors. Certain participating financial institutions may provide microfinancing facilities to borrowers in specific sectors only.

iii.Who are the participating financial institutions that offer microfinancing?

• There are three development financial institutions namely Bank Pertanian Malaysia Berhad (Agrobank), Bank Kerjasama Rakyat Malaysia Berhad and Bank Simpanan Nasional.
• A total of seven banking institutions namely Alliance Bank Malaysia Berhad, AmBank (M) Berhad , CIMB Bank Berhad, Public Bank Berhad, Malayan Banking Berhad, United Overseas Bank (Malaysia) Bhd and Bank Muamalat Malaysia Berhad .

Click here to download full version  of the FAQs [PDF, 93.6 KB].

B.ABM PARTNER Initiative

i.What is “PARTNER” Initiative?

• “PARTNER” is a series of initiatives undertaken by the Association of Banks in Malaysia (ABM) and its commercial bank members to support the growth and development of Small and Medium Enterprises (SMEs). The PARTNER initiatives attempted to streamline, simplify and refine the processes and procedures relating to a SME loan or financing.

ii.What are the aspect covered in  “PARTNER” Initiative?

PARTNER 1

• A simplified application form and documentation checklist.
• A comprehensive list of SME contact points.

PARTNER 2

• A template for the guidance of, and adoption by, banks, which provides a checklist of areas in which the applicant has failed to satisfy.
• A chart depicting the timeline in respect of the processing of loan/financing applications for straight-forward cases supported by Credit Guarantee Corporation Malaysia Berhad.
• A chart depicting a refined timeline in respect of the processing of loan/financing applications for straight-forward cases.

For more information, visit ABM’s website.

C.SME Loan / Financing Rejection

i.Why was the loans application rejected despite being transparent with all the documents?

• There are many factors that could result in this. While transparency is paramount, the business’s sustainability, cash flow, income generation and other risk factor also needs to be considered closely by prospective lenders.
• The bank has an obligation to clearly state why your loan application was rejected so that you may take appropriate steps to mitigate for these factors.
• SMEs are encouraged to ‘shop around’ for financing, as different lenders would have different risk appetite.

ii.What do I do if my loan application is rejected?

• You can try to apply at another participating financial institution. Different participating financial institutions have different eligibility criteria.

iii.What do I do if the bank rejects my application without giving a proper reason?

• All banks are required by Bank Negara Malaysia to provide you with reason for rejection. If you are rejected without a reason, you can contact the following at Bank Negara Malaysia to submit your complaint:

PART 2: Credit Bureau

A.Difference Between Central Credit Reference Information System (CCRIS) and other credit bureaus (Credit Bureau Malaysia & CTOS)

i.What is CCRIS?

• CCRIS is a system that collects credit information on borrowers from financial institutions and supplies the information back to them.
• CCRIS 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.
• CCRIS is not a blacklist system as perceived by some people.
• For more information, visit CCRIS’s website or view:
  • A sample and explanatory notes of CCRIS Credit Report
  • Full version of CCRIS FAQ

ii.What is the different between Credit Bureau Malaysia (CBM) and CTOS?

• CBM and CTOS are private Credit Reporting Agency under the ambit of the Credit Reporting Agencies Act 2010.
• CBM accesses and maintains both positive and negative credit information in order to provide a more comprehensive view of an SME’s or Consumer’s credit standing. The Bureau obtains its credit information from the Central Credit Reference Information System (CCRIS) and non-bank credit Information.

For more information, visit CBM’s website.

• CTOS is not related to Bank Negara Malaysia. It is a database that keeps information on legal proceedings against individuals and business entities in Malaysia. Any information on bankruptcy suits against an individual or a company will be gathered by CTOS and transferred into its database.

For more information, visit CTOS’s website.

PART 3: Avenues for Redress

A.Small Debt Resolution Schemes (SDRS)

i.What is SDRS?

• SDRS provides assistance to viable small and medium enterprises (SMEs) facing business financing problem with financial institutions through restructuring or rescheduling of the existing financing.

ii.Who is eligible for SDRS?

• Malaysian-owned companies (at least 51%) in all economic sectors.
• Meet the SME definition criteria.
• Viable SMEs facing financial difficulties with financing from financial institutions.
• Applicable for business related financing only.
• Business is still on-going.

iii.How to apply SDRS?

• Applicant can click here to download SDRS Form or obtain the SDRS application form from:
• Participating financial institutions (PFIs)
• BNMLINK / BNM Regional Offices

Click here to download  full version  of the FAQs [PDF, 93.6 KB].

B.Making a complaint against banking institution

i.How to make a complaint against banking institution?

• Complaint can be make through the phone call or written formally to the banking institution. If complaint make by phone, remember to note down the name of the officer spoke to, date and time of called.
• Follow up with a complaint letter if the matter is complicated. Provide the important information for example name, account number and photocopies of relevant documents, and keep a copy of the complaint letter for own reference.

ii.What is the standard complaint procedure?

• All banking institutions have set up a dedicated Complaints Unit to deal with customers' complaints. Therefore, first lodge a complaint with the banking institution concerned, as they will have a record of details readily available.
• If the matter still could not be resolved upon the submission of complaint to the respective banking institution, the customer can submit a complaint or seek for redress from the Association of Banks in Malaysia (ABM) and Bank Negara Malaysia through the following channels:

Q:  Why did the authorities raid such companies?
A:  The raids were conducted in the interest of protecting the affected investors from putting more money at risk as well as the public at large.

The companies that are involved are investigated for suspected offences that include illegal financial schemes, money laundering, tax evasion, false description including misrepresentations, appointment of agents without licence and failure to lodge statutory documents.
 
Q:  What is the concern with the business model of such companies?
A:  The concern is that such companies are operating schemes believed to be not sustainable. Such companies promised high monthly returns to the investors and a guarantee to buy back the gold. Such schemes are not funded through actual gold trading but from new monies invested into such schemes.
 
Frequently, the amount of assets and monies held by such companies do not commensurate with the amount collected from the investors.
 
Q: Why have the authorities only taken action now?
A:  Any enforcement action can only be taken when it has been established that there is reason to believe an offence has been committed. This is to avoid hasty or reckless enforcement actions that may affect genuine businesses.
 
Q:  What is the status of the actions by the authorities?
A:  The investigations are now ongoing. Regular statements will be issued by the authorities to keep the public informed of the progress of the investigations. Members of the public are advised to only refer to information from official statements issued by the law enforcement agencies for updates on the case.
 
Q:  How long will the investigations take?
A:  The length of the investigations would depend on the complexity and magnitude of the case. The complexity increases due to the international dimension of such cases. Cooperation by the affected parties will facilitate the investigation process. The investigations are accorded high priority and all necessary resources are being mobilised by the relevant enforcement agencies to bring the investigations to the earliest conclusion.
 
Q:  Why have the assets been frozen and seized?
A:  In cases of suspected illegal financial schemes, the authorities conduct search and seizure operations to secure the evidence and to avoid the companies from destroying or suppressing evidence. This also prevents the assets from being dissipated to the detriment of the investors.
 
Under section 44 of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA), the law enforcement agencies are empowered to freeze any assets when it is suspected that an offence of money laundering has been committed.
 
Q:  What is going to happen to the assets and gold that have been seized?
A: Any assets seized during the course of raids are meticulously documented and accounted for and maintained in safe custody. If there are criminal proceedings, such assets will only be dealt with at the direction of the Court.
 
Q:  Can an affected investor claim his/her money or gold from the seized assets?
A:   Assets seized during the course of the investigations can only be dealt with at the direction of the Court. Investors may file to the Court a third party claim for the return of his/her money or gold. Information on whether, and how, to file a claim will be provided after court proceedings are concluded.

Q:  What is the advice to members of the public who would like to invest?
A:  The public is advised to be cautious of investment schemes that promise high returns with seemingly low risk, with an arrangement that guarantees the return of the principal amount invested. Members of the public are also advised to check with the relevant authorities when dealing with companies or individuals offering such seemingly attractive business opportunities or financial services that are not licensed by the authorities.
 
As a guide, members of the public are encouraged to observe the following when evaluating an investment scheme:

• 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:
  • /web/financial-fraud-alert
  • http://www.sc.com.my/sub.asp?pageid=&menuid=233

If you come across fraudulent investment schemes, you are encouraged to lodge a police report.

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

Please refer to Bank Negara Malaysia's payment system section 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.

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)

For the latest FAQs on CCRIS, you may go to /ccris

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. If an item is out of stock, does that mean it is no longer available?
6. What is the refund/return policy?
7. Does Bank Negara Malaysia 'buy back' Commemorative Coins?
8. 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. 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.

6. 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.

7. 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.

8. 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.

The following information is to help you understand better the features of Bon Simpanan Merdeka 2009 (BSM):

1. Who is eligible for the BSM?

Malaysian citizens who are 56 years old and above
Malaysian citizens who are retired on medical grounds regardless of age.

2. When is the offer period for the BSM?

The BSM is offered to the public from 18 February to 17 March 2009 and from 4 May to 3 June 2009 for the second series.

3. What is the basis of the allocation of the BSM?

The allocation of BSM to the applicant is based on "first come first basis" and is subject to such terms and conditions as specified by Bank Negara Malaysia.
The payment for the BSM applied on the application date does not imply that the applicant would be successful in the allocation of the BSM.

4. What is the frequency of issuance for the BSM?

There will be two issuances for the BSM; i.e. 18 March 2009 and 4 June 2009.

5. What is the tenure of the BSM?

The BSM will have a maturity of three years.

6. What will be the minimum and maximum amount of subscription?

The minimum amount of holding per BSM holder is RM1,000 per application and in multiples of RM100, e.g. RM1,100, RM1,200, etc.

The maximum aggregate holding per BSM holder for the two series is RM50,000 at any one point of time for the duration of the BSM, i.e. 2009 to 2012.

7. Why is the maximum holding per BSM holder fixed at RM50,000 instead of RM100,000 as in the Bon Simpanan Merdeka 2004 and 2005?

The maximum holding of RM50,000 per BSM holder is to allow a wider distribution of the BSM, so that more citizens can benefit from it.

8. Would profit be paid on applicants' investments from the date of application to the date of issuance of BSM?

The agent banks will pay the BSM holder the prevailing savings account rate for the period between the date of application and the date of issuance.
For example, if you apply for the BSM on 18 February 2009, you will receive the savings account rate from 18 February to 17 March 2009.

9. What is the profit for the BSM?

The profit for the BSM is 5% p.a. This means the profit is approximately 0.42% (5% divided by 12), of the holding amount at the end of each month.

10. How often will profit be paid to the BSM holder?

Profit will be paid on a monthly basis.
The profit from the BSM will be credited directly into the BSM holders' deposit accounts maintained with agent banks.

11. Will the returns on BSM be subject to tax?

No, returns on the BSM are exempted from tax.

12. Can the BSM holder exercise early and partial redemption of the BSM?

The BSM can be redeemed early at the nominal value and including the profit amount due before the maturity date but after the first profit payment.

The profit payment will be apportioned based on the number of days the BSM is held.
Minimum redemption amount allowed is RM100.
BSM holder may redeem his BSM in multiples of RM100.

13. When and how can BSM holder redeem the BSM at maturity?

Redemption proceeds (including the last profit payment) will automatically be paid by crediting directly into the BSM holder's account maintained with his agent bank at maturity.
14. Is the BSM transferable?

The BSM is non-negotiable, non-transferable and non-assignable.
In the event of the demise of a BSM holder, the BSM held by the deceased BSM holder shall form part of his estate.

15. What documentation is required when applying for subscription of the BSM?

An original or a certified photocopy of the Identity Card (I.C.).
For those who retired on medical grounds, original and / or certified photocopies of supporting documents from the relevant parties.

16. Where can the BSM be subscribed?

The BSM can be subscribed at all commercial banks, including Islamic banks, Bank Kerjasama Rakyat Malaysia Berhad, Bank Simpanan Nasional and Bank Pertanian Malaysia Berhad.
For further information, please contact Bank Negara Malaysia TELELINK
at 1300 88 5465

1. Will the RM1 coin still be accepted as legal tender from 7 September to 6 December 2005? Yes. Financial institutions and shops will continue to accept the current coins for transactions during this period.  

2. What should I do if retailers and financial institutions refuse to accept RM1 coin during the stipulated period? You can lodge a complaint with Bank Negara Malaysia through the Currency Management and Operation Department at 03-26907442/ 26907417.  

3. Where can I exchange my RM1 coins?

You can exchange your RM1 coins, at no charge, from 7 September to 6 December 2005, at :

• ABN AMRO Bank Berhad
• Affin Bank Berhad
• Alliance Bank (M) Berhad
• AmBank Berhad
• Bangkok Bank Berhad
• Bank Islam Malaysia Berhad
• Bank Muamalat Malaysia Berhad
• Bank of America Berhad
• Bank of China (M) Berhad
• Bank of Tokyo Mitsubishi (M) Berhad
• Bumiputra Commerce Bank Berhad
• Citibank Berhad
• Deutsche Bank (M) Berhad
• EON Bank Berhad
• Hong Leong Bank Berhad
• HSBC Bank (M) Berhad
• J.P. Morgan Chase Bank Berhad
• Malayan Banking Berhad
• OCBC Bank (M) Berhad
• Public Bank Berhad
• RHB Bank Berhad
• Southern Bank Berhad
• Standard Chartered Bank (M) Berhad
• The Bank Of Nova Scotia Berhad
• United Overseas Bank (M) Berhad

- Bank Simpanan Nasional State Main Branches,
- Bank Negara Malaysia Kuala Lumpur, Pulau Pinang, Kuala Terengganu, Johor Bahru, Kuching and Kota Kinabalu

 
4. Is there a maximum quantity of RM1 coins that can be exchanged? No, there is no limit.

Q1: Why did the authorities raid companies operating illegal financial schemes although no report was lodged against these companies?

Answer: The raids were conducted in the interest of protecting the affected investors from putting more money at risk as well as deterring members of the public from participating in the companies. Investors run the risk of losing their money if they participate in illegal financial schemes and perpetrators or promoters of these illegal schemes can face enforcement action and be charged in court.

Q2: What are the possible suspected offences?

Answer: The companies involved are investigated for various suspected offences that include illegal financial schemes, money laundering, tax evasion, cheating and illegal pyramid scheme.

Q3: Why have the authorities only taken action now?

Answer: The illegal financial schemes are now more complex. Therefore, joint actions by enforcement agencies (National Coordination Committee to Counter Money Laundering) are required to facilitate end-to-end investigations, covering actions not only on operators, but also on promoters and investors.

Q4: What is the concern with the business model of such companies?

Answer: The companies’ operations are not sustainable. They are dependent on the recruitment of new investors to ensure the flow of funds to pay for the promised returns to the investors and the operational costs of the operations. Such companies promised unrealistically high returns or profits to the investors and will cease when the scheme collapses due to lack of new investors or due to action by enforcement authorities.  

Q5: Why have the assets been frozen and seized?

Answer: In any investigation on illegal financial schemes, the authorities conduct search and seizure operations to secure evidence and to avoid the companies from destroying or suppressing evidence necessary to prove the offence.

Investigation powers, such as freezing and seizing of assets, including assets in the financial institutions are exercised under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA). These are to prevent the assets from being dissipated to the detriment of the investors when it is suspected that an offence of money laundering has been committed.

Q6: What is going to happen to the assets and money/cash that have been seized?

Answer: Any assets seized during the course of raids are documented and accounted for and maintained in safe custody, in accordance with the requirements of the law. If there are criminal proceedings, such assets will only be dealt with at the direction of the Court.

Q7: Can an affected investor claim his/her money from the seized assets?

Answer: Assets seized during the course of the investigations can only be dealt with at the direction of the Court. Investors may file to the Court a third party claim for the return of his/her money.

Q8: How long will the investigations take?

Answer: The length of the investigations would depend on the complexity and magnitude of the case. Cooperation by the affected parties will facilitate the investigation process.

Q9: What is the advice to members of the public who would like to invest?

Answer: Members of the public must be cautious when approached by promoters of investment schemes that promise high returns with seemingly low risk. They must check with the relevant authorities when dealing with companies or individuals offering such very attractive business opportunities or financial services.

As a guide, members of the public are encouraged to observe the following when evaluating an investment scheme:

1. Remember - if it sounds too good to be true, it's probably not true;
2. 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;
3. Deal only with licensed financial institutions and authorised dealers;
4. Most scheme operators are registered companies, therefore you need to check with the relevant authorities before investing/ depositing;
5. Don't be pressured or rushed to invest;
6. Be extra careful with investments over the internet;
7. Be sceptical of any investment opportunity that is not in writing;
8. The person who tries to recruit you is someone you think is trustworthy, like a neighbour or someone in a community group. In most cases, the recruiter may have already invested in the scheme and received significant dividends.
9. The promotions may be made by mail, telephone, Internet, seminar or in person, but the intention is always the same, that is, to take money from unsuspecting victim.
10. In case an investment has been made, keep copies of all the investment documentation; and
11. Refer to the following financial fraud alert websites and financial consumer alert list:
    • Financial Fraud Alert Website of Bank Negara Malaysia
    • Financial Consumer Alert List

If you come across fraudulent investment schemes, please lodge a police report.

Q10.       What are the risks involved in participating in these illegal scheme?

• Legal - Investors and agents may face abetment charge under the law
• Financial - 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. In addition, the investors may incur additional costs should they engage lawyers to bring a civil suit against the perpetrators
• Social/Family – Breakup in family institution whereby those who recruit family and friends, when the scheme collapses, not only do the investors/family members lose their money but it severe the relationships between family, friends, neighbours and the community.
• Safety - 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

Q11.    What other measures that BNM have instituted to address these illegal schemes?

Financial institutions have been instructed to exercise heightened vigilance to detect and deter perpetrators of such fraudulent scams for abusing the financial system. Clients that fail to fulfil due diligence requirements will risk having their accounts or transactions terminated.

Q12.    What should I do if I’m a victim?

• Lodge a police report.
• Then, lodge a report to the relevant enforcement agency.
• You must keep all records and documentations for the investments such as bank-in slips, deposit slips, agreements, vouchers that you received from the company or perpetrator so that you can use the documents to take action against the company.
• This includes details of the officers or key persons that you dealt with in the company. This information could prove useful for enforcement purposes.

Q13.    What is the status of the investigation and to whom that we should refer?

For investigation solely by BNM, you may refer to Status of cases investigated

Q14.    Where can I get help or make a report to BNM?

If you have any information pertaining to illegal financial schemes, or are a victim of such schemes and want to seek advice, you can directly contact BNMTELELINK at the following channels:

BNM Telelink: 1-300-88-5465
Email: bnmtelelink@bnm.gov.my
Facsimile: 03-2174 1515

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