Guan Eng: SME Bank must restore public trust after RM460k BNM penalty

 

Former finance minister Lim Guan Eng has called on Small-Medium Enterprise Development Bank Malaysia Berhad (SME Bank) to “come clean” and reassure the public that it complies with professional banking standards.

This was following the imposition of an RM460,000 administrative monetary penalty by Bank Negara Malaysia (BNM) on SME Bank.

In a statement, Lim said BNM had disclosed on Jan 29, 2026, that the penalty was imposed on SME Bank on Nov 20 last year for failing to promptly submit suspicious transaction reports (STRs).

He stressed that SME Bank plays a critical role in supporting micro, small and medium enterprises (MSMEs), particularly amid mounting economic pressures such as destructive price competition from foreign companies, US-imposed tariffs, higher export costs due to the stronger ringgit, and rising labour expenses.

Lim noted that SME Bank had previously announced that the federal government had entrusted it with implementing nearly RM2 billion in strategic national initiatives to support MSME scaling, technology adoption, and productivity enhancement across priority sectors.

“However, it is concerning that BNM discovered that SME Bank failed to promptly submit an STR on suspicious activities conducted by several customers,” he said, adding that the breach was attributed to inadequate staff awareness of STR-related requirements.

A matter of trust

Lim said the obligation to promptly submit STRs is crucial to mitigate the risk of banks being used as channels for money laundering, terrorism financing, and other serious criminal activities.

BNM also disclosed that SME Bank paid the RM460,000 penalty on Dec 3, 2025. Lim said the amount is estimated to be equivalent to about five percent of the bank’s latest quarterly net profit.

“For SME Bank, the monetary cost of the fine is less urgent than the need to regain public confidence that it can be trusted, can perform, and can deliver for MSMEs,” he said.

Questioning the bank’s readiness, Lim asked whether SME Bank, which is under the supervision of the Entrepreneur and Cooperatives Development Ministry, could be trusted to safeguard the interests of MSMEs if it faces compliance issues and inadequate staff awareness.

This has national significance, he said, noting that MSMEs contribute 38 percent to Malaysia’s gross domestic product, generate 48 percent of jobs, and account for 13 percent of the country’s exports.

According to BNM, under Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document, reporting institutions are required to promptly submit STR to BNM whenever the institution suspects or has reasonable grounds to suspect that the transaction, regardless of the amount:

• appears unusual;

• has no clear economic purpose;

• appears illegal;

• involves proceeds from an unlawful activity or instrumentalities of an offence; or

• indicates that the customer is involved in money laundering and terrorism financing.

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- Mkini