Financial Intelligence Bank Negara

Behind the Scenes of Financial Intelligence: How Bank Negara Collects and Shares Information Under AMLA

Every day, banks and other businesses in Malaysia quietly report suspicious transactions to Bank Negara Malaysia. What happens to that information, who gets to see it, and how is it kept confidential?

Introduction

Most people never think about what happens after they deposit a large sum of cash or transfer money overseas. Behind the counter, however, a system is at work. Banks, insurers, money changers, lawyers and many other businesses are required by law to watch for unusual transactions and report them. These reports flow to Bank Negara Malaysia (BNM), which analyses them and, where necessary, passes the results to the police, the Malaysian Anti-Corruption Commission (MACC) or other agencies.

This system is known as financial intelligence. It is governed mainly by Part III of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613), commonly known as AMLA or AMLATFPUAA 2001. This article explains, in plain language, how Bank Negara collects financial information, when it can share that information within Malaysia and with other countries, and how the law protects that information from misuse.

Bank Negara as the “competent authority”

AMLA places one institution at the centre of the financial intelligence system, known as the “competent authority”. Under section 7, the Minister of Finance may appoint the competent authority by an order published in the Gazette. Bank Negara Malaysia was appointed to this role with effect from 15 January 2002, the same day AMLA came into force.

Publication in the Gazette is not a mere formality. It gives the appointment public legal recognition, so that anyone dealing with Bank Negara in this role can be sure it is acting with proper authority. Section 7 also allows Bank Negara to authorise its own officers, or other persons, to carry out its functions or assist it. This lets a single institution handle a very large volume of work, while Bank Negara remains responsible for what is done in its name.

Within Bank Negara, this work is carried out by its Financial Intelligence Unit (FIU). In simple terms, the FIU is the collection and analysis centre for suspicious financial activity in Malaysia.

Section 7A adds another layer. It allows the Minister of Finance, on Bank Negara’s recommendation, to appoint other bodies as regulatory or supervisory authorities for particular sectors. This reflects the reality that the risks faced by a bank are very different from those faced by a stockbroker, a casino or a money changer. For matters relating to terrorism financing, bodies such as Bank Negara, the Securities Commission Malaysia (SC) and the Labuan Financial Services Authority (Labuan FSA) act as supervisory authorities in their respective sectors.

Where does the information come from?

Reporting institutions

The main source of financial intelligence is a group of businesses known as “reporting institutions”. These are listed in the First Schedule to AMLA and fall into two broad groups. The first group is financial institutions, which include commercial and Islamic banks, investment banks, insurers and takaful operators, money changers and remittance companies, e-money issuers, stockbrokers, fund managers, development financial institutions such as BSN and Agrobank, moneylenders and credit card issuers. The second group is non-financial businesses and professions, which include lawyers, accountants, company secretaries, notaries public, registered real estate agents, dealers in precious metals and gemstones, pawnbrokers, casinos and trust companies.

Section 12A allows the Minister of Finance, on Bank Negara’s recommendation, to add new types of businesses to the definition of “financial institution” by an order in the Gazette. This matters because financial services change quickly. New products such as digital wallets, online lending platforms and other fintech services can create new opportunities for criminals, and section 12A allows the net to be widened without amending the entire Act.

Suspicious transaction reports

Under section 14, reporting institutions must report any suspicious transaction to the competent authority. This is known as a suspicious transaction report (STR). There is no minimum amount. Even a small transaction, or an attempted transaction that never goes through, must be reported if it is suspicious.

What makes a transaction suspicious? Examples given in the guidance for reporting institutions include large cash deposits that do not match a customer’s known income, many small cash deposits that add up to a large total, a dormant account that suddenly becomes very active, money being moved in and withdrawn almost immediately, frequent transfers to offshore financial centres, and customers who are reluctant to explain who they are or where their money comes from. Transactions linked to high-risk countries, and staff who seem unusually close to a particular customer, can also raise concern.

An STR typically contains details of the person carrying out the transaction, the account holder or recipient, the type and amount of the transaction, and an explanation of why it appears suspicious.

Cash threshold reports

Separately, banks and certain financial institutions must file a cash threshold report (CTR) with Bank Negara for cash transactions of RM25,000 or more in a single day. This threshold was lowered from RM50,000 with effect from 1 January 2019. Cash deposits and withdrawals made on the same day are added together. For example, a customer who deposits RM15,000 and withdraws RM10,000 on the same day reaches the RM25,000 threshold, and the transactions must be reported.

A CTR is not an accusation. It is a routine report that applies to everyone. However, deliberately splitting cash transactions into smaller amounts to avoid the RM25,000 threshold, a practice known as “structuring”, is itself an offence under section 4A of AMLA.

Other sources

Bank Negara may also receive information from foreign financial intelligence units, from local agencies and from members of the public. Anyone with information about suspected money laundering or terrorism financing may report it to the police or to Bank Negara. Reporting institutions must also keep proper records of transactions and customer identity, generally for at least six years, so that the money trail can be traced later if needed.

What does Bank Negara do with the information?

Section 8 sets out the core work of the competent authority. Bank Negara must receive and analyse information and reports from any person, including STRs filed by reporting institutions. Where it is satisfied, or has reason to believe or suspect, that a transaction involves the proceeds of an unlawful activity or that a serious offence has been, is being or is about to be committed, it passes the report or the information derived from it to the relevant enforcement agency or coordination agency.

Bank Negara can also compile statistics and records, give instructions to reporting institutions about the reports they submit, make recommendations to regulators and enforcement agencies, and set training requirements for reporting institutions on their reporting and record-keeping obligations.

The flow of information can be summarised as follows.

How financial intelligence moves from the bank counter to the courtroom

It is important to understand that an STR is not evidence of guilt. Many reports turn out to have innocent explanations. The purpose of the system is to spot patterns, connect information from different sources and identify the cases that deserve a closer look. Modern enforcement increasingly relies on this kind of intelligence-led approach, where financial intelligence is often the starting point of an investigation rather than something gathered only after a crime has been discovered.

Sharing information within Malaysia

Financial intelligence is only useful if it reaches the people who need it. Section 9 allows Bank Negara to authorise, in writing, enforcement agencies, coordination agencies and their designated officers to access specified information for the purpose of carrying out their functions.

Several safeguards are built into this process. The authorisation must be in writing, which creates a clear record of who was given access and why. Bank Negara must specify what information may be accessed, so agencies cannot simply help themselves to everything. Access is also tied to the functions of the receiving agency, and it is given to named or designated officers who can be held accountable for how they use it.

Section 9 also contains two special cases. Where information comes from a reporting institution carrying on business in Labuan, Bank Negara must authorise the Labuan FSA to have access to it, so that Labuan’s regulator is not left in the dark. Bank Negara may also authorise the Attorney General or a designated officer to access information for the purpose of handling a foreign country’s request for mutual assistance in criminal matters.

Beyond these legal channels, Malaysia has set up bodies to coordinate the fight against money laundering. The National Coordination Committee to Counter Money Laundering (NCC), established in 2000, coordinates and monitors anti-money laundering and counter-terrorism financing efforts at the national level. It also oversees the National Risk Assessment (NRA), which evaluates the money laundering and terrorism financing risks faced by different sectors. The National Financial Crime Centre (NFCC) brings together agencies such as the police, the MACC and Bank Negara to carry out coordinated operations against financial crime.

Sharing information with other countries

Money laundering rarely stops at national borders. Criminals often move money through several countries to hide its origin. Section 10 therefore allows Bank Negara to exchange information with its counterparts overseas, known as “corresponding authorities”, which are usually foreign financial intelligence units.

There are two routes for this. The Minister may enter into a written agreement with a foreign government, or Bank Negara may enter into a written arrangement directly with a foreign corresponding authority.

Before Bank Negara can pass on STRs and other reports to a foreign authority, several conditions must be met. First, Bank Negara must have reasonable grounds to suspect that the information is relevant to investigating or prosecuting money laundering, terrorism financing, restricted activity financing or a substantially similar offence. Second, there must be a written agreement or arrangement in place under which the foreign authority has agreed to share similar information with Malaysia on request. This ensures the relationship works both ways. Third, Bank Negara must be satisfied that the foreign authority has given proper undertakings to keep the information confidential and to control how it is used, including an undertaking that it will not be used as evidence in other proceedings. Finally, Bank Negara must record in writing its reasons for every decision to share information in this way.

The rule against using shared intelligence as evidence is significant. It means that information received from Malaysia can be used by the foreign authority to develop leads, but it cannot simply be produced in court as proof. This protects the confidential nature of financial intelligence.

Malaysia’s cooperation also takes place through international bodies. The most important is the Financial Action Task Force (FATF), which sets the global standards for fighting money laundering and terrorism financing. Malaysia has been a member of the Asia/Pacific Group on Money Laundering (APG), the FATF’s regional body, since May 2000, and a Bank Negara representative served as APG Co-Chair from 2020 to 2022. Malaysia also works with other international frameworks and bodies, including the United Nations Convention against Corruption, INTERPOL and ASEAN.

How is your information protected?

Financial intelligence is highly sensitive. It may contain details of people’s bank accounts and transactions, including people who have done nothing wrong and may never be charged with any offence. AMLA therefore surrounds this information with strict secrecy rules.

A strict rule of secrecy

Under section 11, a person who obtains information from Bank Negara under AMLA faces two layers of restriction. While he is authorised under section 9, he may only share the information with another authorised officer, and only for purposes connected with his duties. Once he is no longer authorised, for example after changing jobs or retiring, he must not disclose the information at all and must not even make a record of it. In effect, the secrecy obligation follows the information for life.

Limited exceptions

Section 12 sets out the situations in which disclosure is allowed. The main exception is that the information may be used for a prosecution or legal proceedings connected with money laundering, terrorism financing, restricted activity financing or a serious offence, including a foreign serious offence. Without this exception, financial intelligence could never be used to bring criminals to justice.

Section 12 also allows an authorised officer to share information about a person’s affairs with that person. For a company, this includes its directors and officers, and those involved in preparing or providing information to Bank Negara on its behalf. This is a matter of fairness, allowing people to see information about themselves where appropriate. It does not, however, give anyone an automatic right to see everything Bank Negara holds.

Anyone who receives information that does not relate to his own affairs must not record it or pass it on to anyone else. Breaching this rule is an offence punishable by a fine of up to RM3 million, imprisonment of up to five years, or both. In addition, a person who obtains information from Bank Negara under this Part cannot generally be compelled to produce it in court, except where this is necessary to give effect to AMLA itself.

Protection for those who report, and no tipping-off

The law also protects the people who make reports. Under section 20, reporting institutions are protected from liability under banking secrecy and other confidentiality laws when they report suspicious transactions. They are also protected from civil, criminal and disciplinary action for reports made in good faith.

At the same time, a reporting institution must not tell a customer that an STR has been made about him, as this could alert a suspect and damage an investigation. This is known as “tipping-off” and is an offence under AMLA. This is why a bank will not tell you if it has filed a report about your account.

How well does the system work?

Malaysia’s financial intelligence system is regularly assessed against international standards. In the 2025 Mutual Evaluation Report of Malaysia, issued by the FATF and the APG, Malaysia was found to have achieved a substantial level of effectiveness in the use of financial intelligence. The assessors recognised improvements such as wider access to financial information, upgrades to Bank Negara’s Financial Intelligence System (FINS), better integration of databases, and closer cooperation between the FIU, enforcement agencies and supervisors. Domestic agencies also gave consistently positive feedback on the quality of the intelligence they received from the FIU.

The report also identified areas for improvement. These include the availability of accurate information on who really owns and controls companies, known as beneficial ownership, and better use of certain sources of intelligence, such as declarations of cash carried across the border. As criminals find new ways to move money, the system will need to keep evolving.

What does this mean for you?

For the vast majority of people, the financial intelligence system operates entirely in the background. Still, it helps to understand how it affects ordinary account holders.

Your bank may ask questions. If you make a large or unusual transaction, your bank may ask about the source of the money or the purpose of the transaction. This is part of its legal duty to know its customers, and answering honestly is the best course.

You will not be told if a report is made. Because of the rule against tipping-off, your bank cannot tell you whether it has filed a suspicious transaction report about you.

Do not split cash transactions to avoid reporting. Breaking up cash deposits or withdrawals into amounts below RM25,000 to avoid a cash threshold report is itself an offence, even if the money is entirely legitimate.

Keep records of large transactions. If you receive or move a significant sum, keep documents such as sale agreements, invoices or loan letters that show where the money came from.

Your information is protected. Information reported to Bank Negara is subject to strict secrecy rules, and those who misuse it face heavy penalties.

Seek legal advice early. If you are contacted by an enforcement agency or your account is frozen, speak to a lawyer as soon as possible.

Conclusion

Part III of AMLA is the engine room of Malaysia’s fight against money laundering. It connects the reports made by banks and other businesses with the agencies that investigate and prosecute financial crime, both at home and abroad. Bank Negara sits at the centre of this system, collecting information, analysing it and passing it on where there is reason to suspect wrongdoing.

At the same time, the law recognises that financial intelligence is sensitive and can affect innocent people. Access must be authorised in writing, sharing overseas depends on strict conditions, and anyone who misuses the information faces serious penalties. The system is designed to strike a balance between catching criminals and protecting the privacy of ordinary account holders.