KUALA LUMPUR, Dec 10: Under Bank Negara Malaysia’s guidelines, financial institutions in the country must give written notices within a reasonable timeframe as well as state the reasons for their closure or termination of any account under their institution, said the Ministry of Finance (MoF).
MoF said this in a written response to a question from Senator Dato Sivaraj Chandran at Tuesday’s (Dec 9) Selangor State Legislative Assembly, on whether commercial banks are allowed to close or terminate, without any official notice, company accounts that are not under any investigation under AMLA or facing any restrictions from enforcement agencies.
He also wanted to know the existing guidelines and regulations to ensure protection for clients and prevent any misuse by commercial banks.
The ministry said it took the financial services providers’ practices in the country seriously, including that of commercial banks, to ensure that financial consumers get fair and transparent treatment.
In order to prevent any abuse of power by financial institutions, Bank Negara Malaysia has set clear guidelines through the Fair Treatment to Financial Consumers (FTFC) Policy Document.
The policy sets out the guidelines and requirements to ensure fair treatment for financial services users, in a responsible and professional manner, MoF said.
On the closure of individual or company accounts, commercial banks do have the right to terminate its services based on the terms and conditions of the agreement of the accounts. However, this must be in accordance with the guidelines set by the central bank under the Financial Services Act 2013 (FSA) and Development Financial Institution Act 2002 (DFIA).
It reiterated that in the event of a closing down an account, the said financial institution must issue a written notice to the affected account holder within a reasonable timeframe.
The confidential notice must also state the reasons for closure such as infringement of the terms and conditions for the account, without having to reveal any sensitive information related to an investigation.
The notice should also have an explanatory note to the account holder on their rights and avenues for appeal, as well as the timeframe and processes for appeal.
–WE