KUALA LUMPUR, March 31 — Malaysia’s financial system remained resilient in 2025, underpinned by a robust regulatory framework and prudent oversight, said Bank Negara Malaysia.
The central bank focused on four key areas: aligning regulations with global standards while adapting to local needs, strengthening financial institutions’ ability to manage operational disruptions in a digitised environment, and reinforcing consumer trust.
To enhance resilience, BNM continued aligning its regulatory framework with Basel III standards, protecting depositors and supporting confidence in the financial system, it said in its Annual Report 2025.
In 2025, BNM issued three key Exposure Drafts: the Capital Adequacy Framework (IRB for Credit Risk), Capital Adequacy Framework (Counterparty Credit Risk), and Interest Rate Risk in the Banking Book (IRRBB), to improve how banks measure and manage risks.
Reflecting rising digital risks, BNM updated the Risk Management in Technology (RMiT) requirements to mitigate cyber incidents and technical failures.
The central bank also revised policies to strengthen consumer protection, banning the flat rate and Rule of 78 methods for personal financing, ensuring borrowers pay interest or profit only on outstanding amounts. Similar rules will apply to hire-purchase financing under the Hire-Purchase (Amendment) Act 2026, effective 1 June 2026.
In digital payments, BNM enhanced payment card rules, introducing stronger authentication and self-service security toggles, while planning stricter rules on fraud response to improve coordination and speed across the industry.
The passing of the Consumer Credit Act 2025 (CCA) marked another milestone, harmonising consumer credit regulation and strengthening protections.
To ensure crisis preparedness, banks are required to conduct more detailed scenario planning and assess recovery options under realistic stress events.
In 2025, BNM undertook 284 supervisory and enforcement actions, imposing RM15.9 million in penalties, mainly for breaches in anti-money laundering, technology risk, prudential standards, and foreign exchange policies. Nine banks were penalised RM5.6 million for failing to meet regulatory expectations. Enforcement actions are published online to promote transparency and deter misconduct.
Looking ahead, BNM will continue to align prudential standards with global best practices, tailored to Malaysia’s financial environment, to ensure stability and resilience in 2026 and beyond.
