BNM fines company, 2 banks over sanctions breaches

KUALA LUMPUR, 26 AUGUST 2026 —

BNM fines fintech firm, two banks RM901,500 for sanctions breaches

The central bank said on Tuesday it fined Setel Ventures Sdn Bhd RM637,500 on April 15 for delays in updating its sanctions database after the publication of BNM’s Domestic List, which names individuals and entities flagged by the government for money laundering or terrorism financing. Setel also failed to screen customers against the list and verify potential matches, BNM said in a statement.

The breaches were attributed to gaps in Setel’s standard operating procedures (SOPs) and sanctions screening system. The company has since updated its SOPs, rectified the gaps, and enhanced its internal systems to comply with TFS requirements. Setel paid the penalty on May 6.

In separate actions, BNM imposed RM132,000 fines each on Standard Chartered Bank Malaysia and Standard Chartered Saadiq for failing to update their sanctions databases promptly after the Domestic List was published. This led to sanctions screening being conducted against outdated databases, though no specified entities were onboarded or involved in transactions by either bank.

BNM attributed the breaches to deficiencies in the banks’ sanctions screening controls and failure to align the screening process with regulatory requirements. Both banks have since strengthened their controls, improved oversight, and enhanced the timeliness of their sanctions screening to ensure compliance with TFS requirements. They paid the penalties on June 15.

The enforcement actions align with BNM’s published Enforcement Approach, which outlines its processes for addressing breaches of financial regulations. The central bank did not disclose further details about the remedial measures taken by the fined entities.

The penalties highlight the increasing scrutiny on financial institutions and fintech firms to comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations in Malaysia. BNM’s Domestic List is a key tool in the government’s efforts to combat financial crimes, and timely updates to sanctions databases are critical to preventing illicit transactions.

Industry observers note that the fines reflect BNM’s commitment to enforcing compliance, even when no actual breaches of specified entities or transactions occurred. The penalties serve as a reminder to financial institutions and fintech firms to maintain screening systems and promptly update their databases to avoid regulatory action.

For Setel Ventures, the fine underscores the importance of having effective SOPs and internal controls in place, particularly as fintech companies play an increasingly prominent role in Malaysia’s digital economy. The company’s swift remedial actions may mitigate long-term reputational risks, though the financial penalty remains a significant cost.

Standard Chartered Bank Malaysia and Standard Chartered Saadiq, as subsidiaries of a global banking group, are subject to stringent regulatory standards in multiple jurisdictions. The penalties in Malaysia add to the group’s compliance challenges, though the absence of actual breaches of specified entities suggests the issues were procedural rather than substantive.

Looking ahead, financial institutions and fintech firms in Malaysia are expected to prioritise investments in compliance technology and staff training to ensure adherence to BNM’s TFS requirements. The central bank’s enforcement actions may prompt other firms to review their sanctions screening processes to avoid similar penalties.

BNM’s move also signals to the broader regional financial sector that compliance with AML and CTF regulations remains a top priority. As Malaysia strengthens its financial governance framework, firms operating in the country must ensure their systems are and up-to-date to align with regulatory expectations.

Related: Bank Negara Malaysia (BNM) · Kuala Lumpur