Bank Negara announces conditions for currency processing business

13 April 2021

1. What is the purpose of the Order?
   
   The Order sets out the requirements that an applicant has to fulfil in order to be registered under section 26 of the Act to carry on a currency processing business.

2. What is ‘currency processing business’?
   
   ‘Currency processing business’ is defined in section 2(1) of the Act as:

1. The business of:

1. collecting currency note (‘currency note’) or currency coin (‘currency coin’) issued by Bank Negara Malaysia;


2. sorting currency note or currency coin by authenticity and quality; and


3. packing currency note or currency coin by quality, quantity and denomination,

2. any activity declared as a currency processing business under section 23 of the Act.

3. Are financial institutions required to be registered under the Act in order to carry on a currency processing business?
   
   No. Section 24(1) of the Act exempts financial institutions, namely licensed banks under the Financial Services Act 2013, licensed Islamic Banks under the Islamic Financial Services Act 2013 and prescribed financial institutions under the Development Financial Institutions Act 2002, from the requirement to be registered under section 26 of the Act to conduct a currency processing business.

4. What are the requirements that have to be fulfilled in order for an applicant to be registered to carry on a currency processing business?
   
   The requirements are set out in the Schedule to the Order. Broadly, the requirements can be divided in four categories, namely entity requirements, senior personnel requirements, security requirements and operational requirements. The main requirements under each of these categories are set out below.
   
   Entity requirements
    
   The applicant must be a company incorporated and registered or deemed to have been registered under the Companies Act 2016 with a minimum net worth and working capital of RM100,000 respectively.
    
   Senior personnel requirements
    
   Each director, chief executive officer and any person concerned with the operation or management of the applicant must:

1. not have been convicted of an offence relating to dishonesty, fraud, accepting gratification or corruption under any written law within or outside Malaysia;


2. not have been a director, chief executive officer or have been directly concerned in the operation or management of any company which has been convicted of an offence relating to dishonesty, fraud, accepting gratification or corruption under any written law within or outside Malaysia unless he proves that such offence was committed without his knowledge, consent or connivance;


3. have passed security vetting conducted by the relevant authorities;


4. not be an undischarged bankrupt;


5. be a person of probity, personal integrity and good reputation; and


6. have managed his financial affairs properly and prudently.

1. The premises at which the currency processing business is carried out must be used exclusively for that business.


2. The premises must be equipped with security features that include:

1. a security control system encompassing: (i) a security control room installed with a central monitoring system; (ii) a closed-circuit television surveillance system installed at the surroundings of the internal and external areas of the premises; (iii) a trespass, theft and robbery prevention system; and (iv) a visitor control or management system;


2. security guards who have passed security vetting conducted by the relevant authorities;


3. security patrolling by armed security guards at the surroundings of the premises at all times; and


4. a vault or safe room.

3. The applicant, in carrying on a business of collecting currency note or currency coin, for or on behalf of another person, is licensed or engages a person licensed under section 3 of the Private Agencies Act 1971 for the purpose of providing guards and protection for the security of the property or business of that other person.

1. The applicant shall use currency processing equipment which are capable of:

1. detecting and separating counterfeit currency note or currency coin;


2. sorting and packing currency note or currency coin by quality as determined by Bank Negara Malaysia; and


3. sorting and packing currency note and currency coin by quantity and denomination.

2. The applicant must have an operating procedure on currency processing and a business continuity plan.

3. The applicant has an insurance or takaful coverage to cover at all times the total value of currencies of its clients which will be processed by the applicant or in the applicant’s possession.

5. What is the fee payable for an application for registration to carry on a currency processing business?
    
   The application fee is RM500. This is set out in the Currency (Processing Fees for Application of Registration of Currency Processing Business) Regulations 2020 which came into operation on 1 October 2020.