BNM Fines Smile Honesty Forex RM8,400 for CDD Failure

Bank Negara Malaysia (BNM) has imposed an administrative monetary penalty of RM8,400 on Smile Honesty Forex Sdn. Bhd. (SHFSB) for failing to conduct customer due diligence (CDD) on a customer during a currency exchange transaction.

The penalty was imposed on 24 September 2026 under Section 75(2)(b) of Malaysia’s Money Services Business Act 2011. BNM identified the breach during an on-site supervisory examination, which found that SHFSB had not completed the required CDD due to staff oversight.

As a reporting institution, SHFSB must identify customers and verify their identities using reliable and independent documents, data or information. These checks allow institutions to assess exposure to money laundering and terrorism financing risks and reduce the possibility of their services being used for criminal activities.

Following the examination, SHFSB strengthened its internal controls to address the identified gaps. BNM considered the institution’s existing compliance controls, previous compliance record and remedial actions when determining the penalty.

SHFSB paid the RM8,400 penalty on 7 October 2026.

The enforcement action reinforces BNM’s expectations for reporting institutions to maintain effective AML/CFT and counter-proliferation financing controls. Customer due diligence remains a fundamental requirement for identifying customers, verifying their identities and assessing potential financial crime exposure.

The case also highlights how procedural oversights can result in regulatory action, even when the identified failure relates to a single customer transaction. Financial institutions and money services businesses must ensure that CDD procedures are consistently applied and supported by internal controls that reduce the risk of missed checks.

BNM stated that it will continue to take appropriate supervisory and enforcement action against reporting institutions that fail to meet legal and regulatory requirements. The action against SHFSB follows the enforcement approach outlined in the central bank’s published framework.