Be Fair Over Closure Of Company Accounts Association Tells Banks

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The Association of Credit Management Malaysia says while it supports action against money laundering, businesses must be told clearly why their accounts are being suspended or terminated.
ACMM president Sri Ganesh Michiel said sudden account suspensions or closures will severely disrupt the operations of businesses.PETALING JAYA: An NGO says while it supports the tightening of rules on bank account closures linked to money laundering cases, all legitimate businesses should have fair access to banking facilities unless proven guilty of unlawful activity
The Association of Credit Management Malaysia (ACMM) said many businesses had experienced sudden account suspensions or closures without clear explanation or evidence, severely disrupting their operations, in recent months.
“(Such closures) eliminate the financial and audit trail necessary for proper accountability, creating further complications for compliance and tax reporting.
“Account closures based merely on suspicion or internal risk classification, without sufficient justification or opportunity for appeal, contradict the fundamental principles of fairness and natural justice,” it said in a statement today.
This comes after Bank Negara Malaysia recently required banks to issue written explanations and clear appeal procedures for bank account closures to affected customers.
Deputy finance minister Lim Hui Ying said on Oct 23 that BNM’s new directive ensures financial institutions provide written notices to customers whose accounts are closed under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).
These notices must state the reason for closure without disclosing sensitive details that could compromise investigations, and also inform how to file an appeal, the available channels, timelines, and steps to follow.
ACMM president Sri Ganesh Michiel said while the association acknowledges the importance of combating money laundering and terrorism financing, legitimate businesses and people must not be unfairly targeted or left without access to basic banking services.
“Many of these affected parties have not been charged, let alone convicted of any offence, yet they are treated as guilty without trial,” he said.
The association also called for stronger oversight and accountability requirements for banks in the closure of accounts, and for an independent appeal mechanism to review cases of account closure.
“ACMM remains committed to supporting the government and regulatory bodies in upholding the integrity of the nation’s financial system.
“However, this must be balanced with the protection of consumers’ and businesses’ rights to fair treatment and access to essential financial services,” it said. - FMT

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