Banks are in a position to close customer accounts as there is no legal requirement overseeing such matters, said Finance Minister Tengku Zafrul Tengku Abdul Aziz.
He said such a move is a business call by the bank or financial institution based on its internal risk assessment.
“The move to close an account is taken only after a thorough assessment and after giving notice to the customer within a reasonable period,” he said in a parliamentary reply today.
He was responding to a question from Baling MP Abdul Azeez Abdul Rahim, who asked whether a bank has the authority to immediately close a customer’s account based on only “suspicious transactions”.
Azeez also wanted to know whether a bank can close such an account without conducting any investigation or inquiry, and the measures that the bank should take before deciding to close an account.
Nine people and three companies filed a suit against CIMB Bank Bhd and CIMB Islamic Bank Bhd recently, after their current and savings accounts were frozen following claims of proceeds from illicit or suspicious activities in January.
Tengku Zafrul said any action taken is subjected to the terms and conditions agreed upon during the opening of an account.
Based on these terms, a bank can impose restrictions on any account or customer suspected of being involved in misuse or criminal activity, he added.
“If an account’s transactions are suspicious, the bank may impose temporary restrictions to allow a thorough assessment to be carried out, while ensuring money from criminal or fraudulent activities is not removed from the account.”
He said among the forms of restrictions are blocking debit card, automatic teller machine (ATM) and internet banking facilities, as well as closing accounts after the bank is satisfied with the results of its assessment.
“After assessing the appropriate level of risk and implementing such measures, the bank may be subject to a restraining order issued by the authorities. It then can decide whether to continue the transaction or business dealings with the account holder or not proceed with the transaction and close the account.” – TMI