Combating money laundering in Malaysia : current practice, challenges and suggestions
Money laundering is a global threat to financial institutions especially the banking industry since it may weaken and expose the institutions to serious risks such as operational, legal and reputational risks. Against this background, the objectives of the study are to analyse the current practice...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2018
|
| Online Access: | http://journalarticle.ukm.my/19728/ http://journalarticle.ukm.my/19728/1/28741-90593-2-PB.pdf |
| Summary: | Money laundering is a global threat to financial institutions especially the banking industry since it may weaken and
expose the institutions to serious risks such as operational, legal and reputational risks. Against this background, the
objectives of the study are to analyse the current practice on the prevention of money laundering in selected banks
in Malaysia, to investigate the barriers to the implementation of effective Anti-Money Laundering (AML) regulations
and to identify the ways to improve the implementation of AML in Malaysia. The study was conducted using qualitative
method via interviews with 6 respondents from 6 Islamic & Conventional banks in Malaysia. The preliminary findings
showed that the banking institutions’ current practice is fully complying with AML regulations under the AMLA 2001.
The findings also demonstrated that the barriers to effective implementation of AML regulations are in line with those
of previous study, which are lack of expert staff as the top factor together with an additional factor, which is lack of
customers’ education and awareness on money laundering. Hence, to improve the implementation of AML in Malaysia,
this study suggested to firstly strengthen the collaboration with government and relevant authorities to ensure strong
enforcement action is taken against the criminals. Secondly, collaboration of BNM with banks and local media to
increase public awareness and education on financial crime. Thirdly, to invest on employee training, upgrading system
management as well as sufficient resources in compliance unit and finally to intensify the “Three Lines of Defence”
in Bank Risk Management. |
|---|