The Currency Bill 2019

The Currency Bill 2019 (“Bill”) and the Central Bank of Malaysia (Amendment) Bill 2019 (“Amendment Bill”) were passed by the Dewan Rakyat (House of Representatives) of the Malaysian Parliament on 3 December 2019.  The Bill and the Amendment Bill will now be presented to the Dewan Negara (Senate) of the Malaysian Parliament and if passed, to the Yang di-Pertuan Agong for His Majesty’s assent. After receipt of His Majesty’s assent, the laws will be gazetted and come into operation on the dates to be appointed by the Minister of Finance.
The Bill provides for the management of currency of Malaysia, the regulation of currency processing business, currency processing activities and related matters.
A summary of the salient provisions of the Bill is set out below.
  1. The Bill designates Bank Negara Malaysia (“BNM”) as the sole authority to issue currency note and currency coin (collectively “currency”) in Malaysia and that currency is only to be printed or minted under its authority.
  1. BNM is liable for the face value of currency and only currency issued by BNM is legal tender in Malaysia at its face value.
  1. BNM may call in any currency by giving not less than one month’s notice and upon expiration of the notice, the relevant currency shall cease to be legal tender; however, BNM is liable for the face value of such currency upon the presentment thereof to BNM or any agent appointed by it.
  1. The Bill makes it an offence for any person to issue, print or mint, or authorise the issuance, printing or minting of, any note, coin, token, document or instrument, whether tangible or intangible, which is likely to pass as legal tender unless such item is denominated in and fully backed by ringgit or foreign currency. The penalty for such an offence is a fine not exceeding RM50 million or imprisonment for a term not exceeding 10 years or both.
  1. Section 21 of the Bill prohibits any person from making or receiving in a single transaction, any payment using currency which exceeds the maximum aggregate value specified in the Second Schedule of the Bill, or to undertake or structure, or assist or participate in the structuring of any transaction with the intention to avoid the specified maximum aggregate value. It also states that a series of transactions is to be considered as a single transaction if the transactions are made with the same person, for the same purpose and within the same day. This provision will be the legal basis for the cash transaction limit that is proposed to be introduced in the near future.
  1. The Bill requires any person, other than BNM or a financial institution, who carries on a currency processing business or holds itself out to be a registered currency processor, to be registered under section 26. The expression “currency processing business” means –
  1. the business of (a) sorting currency by authenticity and quality; or (b) packing currency by quality, quantity and denomination; or
  1. any other activity declared by the Minister of Finance to be a currency processing business under section 23 of the Bill.
  1. The Bill sets out the duties to be complied with by a registered currency processor, a financial institution that carries on currency processing activities (i.e. the sorting of currency by authenticity or quality, or the packing of currency by quality, quantity or denomination) and the directors and chief executive officers of such entities.
  1. The Bill confers powers of enforcement on BNM as well as the power to make regulations and to issue guidelines and standards.
The Amendment Bill will delete sections 62 to 64 of the Central Bank of Malaysia Act 2009 as these provisions relate to matters that are provided for in the Bill.  The Amendment Bill also introduces a new provision to make it clear that BNM’s powers and functions under the Bill are in addition to, and not in derogation of, its powers and functions under the Central Bank of Malaysia Act 2009.