What regulatory provisions allow BNM to take action against banks?

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Regulatory Framework for Bank Negara Malaysia's Supervisory Actions

Bank Negara Malaysia (BNM) possesses the authority to implement supervisory actions and levy penalties against financial institutions for breaches of regulatory provisions. These powers are primarily derived from the Financial Services Act 2013 (FSA) and the Islamic Financial Services Act 2013 (IFSA). Such actions are contingent upon a thorough assessment of the underlying causes and the extent of impact stemming from service disruptions experienced by the affected institutions.
Powers Under the Financial Services Act 2013 and Islamic Financial Services Act 2013

The FSA 2013 and IFSA 2013 provide BNM with a clear legal mandate to pursue supervisory and enforcement measures against financial entities that contravene any stipulations within the applicable policy documents. This regulatory framework allows the central bank to address instances where critical systems experience unplanned downtime, thereby impacting customer access to services, and failing to remain within defined maximum tolerable downtime limits.
Assessment of Root Cause and Impact

Following incidents such as recent online banking service outages, BNM instructs the involved banking institutions to meticulously identify the root cause of the disruptions. This diagnostic process is crucial for determining the appropriate follow-up actions, which will be shaped by the findings regarding the cause and the overall impact on customers and operations.
Corrective Measures and Customer Communication

In response to service disruptions, BNM requires banking institutions to not only pinpoint the cause but also to implement robust corrective and preventive measures to preclude future occurrences. Concurrently, these institutions are mandated to maintain open communication channels with affected customers, ensuring that all complaints and inquiries arising from the outages are addressed promptly and effectively.

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What regulatory provisions allow BNM to take action against banks?

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