Foreign Exchange Policy (FEP) is part of Bank Negara Malaysia’s broad prudential toolkit to preserve monetary and financial stability.
As the FEP becomes increasingly risk-based, it is important for financial institutions to adopt a dual-track approach in ensuring robust FEP compliance culture.
First, banks shall instil strong FEP awareness among their staff as a preventive strategy to avoid non-compliance in the first place. This includes staff’s comprehensive understanding of FEP to ensure reasonable compliance whilst implementing industry-wide standards as outlined in the Minimum Due Diligence (MDD).
Second, banks shall undertake swift remedial measures to report non-compliance in a transparent manner and address the weakness in a decisive manner. Banks must understand the ramifications of these non-compliances that include administrative or enforcement action.
This programme is not an introduction to FEP but rather a more advanced programme that aims to familiarise bankers with the more common instances of non-compliance that could occur. Participants are expected to gain a more holistic view of FEP compliance principles that include both preventive and corrective measures.