​KembaraXtra – Legal Terms – Refreshing Memory


Refreshing memory is a legal procedure that allows a witness to consult a document or record while giving evidence. The purpose is to help the witness accurately recall events or facts that may have been recorded at an earlier time. Human memory can fade over time, particularly when a case is heard long after the relevant events occurred. The law therefore permits witnesses to refer to reliable records in appropriate circumstances. This promotes accurate and reliable testimony.


Under the Criminal Justice Act 2003, a witness in criminal proceedings may refresh memory from a document made or verified on an earlier occasion. The witness may also refer to a transcript of a sound recording. The key requirement is that the document or recording was created or confirmed when the events were still relatively fresh in the witness’s mind. This enhances the reliability of the information being recalled. The procedure can be used at any stage of testimony.


Refreshing memory does not mean that the document itself becomes the evidence. Rather, the evidence remains the witness’s oral testimony. The document simply assists the witness in recalling details accurately. Opposing counsel is generally entitled to inspect the document being used. This safeguard ensures fairness and allows challenges to the document’s accuracy or relevance.


The procedure is especially important in complex cases involving large amounts of information. Police officers, investigators, accountants, and other professionals frequently keep detailed records. Without the ability to refresh memory, witnesses might struggle to recall precise details after a significant lapse of time. Allowing reference to contemporaneous records improves the quality of evidence. It also reduces the risk of honest mistakes.


Refreshing memory reflects the legal system’s commitment to accuracy and fairness. Courts recognize that memory is imperfect and that reliable records can assist witnesses. At the same time, procedural safeguards prevent abuse of the process. The balance struck by the law seeks to ensure both accuracy and transparency. Consequently, refreshing memory remains a valuable evidential tool.

KembaraXtra – Legal Terms – Refresher


A refresher is an additional fee paid to a barrister for each day of a court hearing after the first day. In lengthy cases, the barrister usually receives an initial brief fee covering preparation and the first day of proceedings. If the hearing continues beyond that day, refresher fees become payable. These fees compensate the barrister for ongoing attendance and advocacy. They are generally lower than the original brief fee.


The brief fee reflects the extensive preparation required before a case begins. This includes reviewing documents, researching legal authorities, preparing arguments, and attending conferences with clients or solicitors. Since much of this work is completed before the hearing starts, subsequent daily fees are often reduced. The refresher recognizes that less preparatory work is needed after the trial has commenced. Nevertheless, continued attendance remains professionally demanding.


Refresher fees are particularly common in lengthy civil and criminal trials. Complex commercial disputes, serious criminal prosecutions, and major public inquiries may last for weeks or even months. In such situations, the barrister must remain available throughout the proceedings. Daily refreshers ensure that the barrister is compensated fairly for this commitment. They also provide financial certainty for legal representatives.


The amount of a refresher fee depends on various factors. These may include the complexity of the case, the seniority of the barrister, and the terms agreed between the barrister and the instructing solicitor. In some cases, the fee structure is negotiated in advance. In others, it may be determined by established professional practices. Transparency in fee arrangements is important for both lawyers and clients.


The concept of a refresher illustrates how legal fees are structured to reflect different stages of litigation. It distinguishes between initial preparation and ongoing courtroom work. This approach recognizes the distinct demands of each phase of a case. By providing additional compensation for extended hearings, refresher fees help ensure that legal representation remains sustainable. They therefore play an important role in legal practice.

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​KembaraXtra – Legal Terms – Referral Order


A referral order is a sentencing measure used for young offenders aged between 10 and 17 years. It requires the offender to attend a youth offender panel and participate in a rehabilitation process. The order is designed to address offending behaviour while encouraging accountability. It focuses on education, responsibility, and reintegration rather than punishment alone. Referral orders form an important part of the youth justice system.


The youth offender panel typically includes trained community volunteers and youth justice professionals. The panel meets with the offender and often involves the offender’s parents or guardians. Discussions focus on the offence, its consequences, and ways to prevent future misconduct. The panel works collaboratively with the young person. This approach encourages constructive engagement rather than simple punishment.


A central feature of the referral order is the contract agreed between the offender and the panel. The contract may require the offender to make reparation to the victim or the wider community. It may also involve participation in educational programmes, counselling, or behavioural interventions. The terms are tailored to the circumstances of the case. Compliance with the contract is closely monitored.


Referral orders are commonly imposed when a young person pleads guilty to a criminal offence for the first time. In most such cases, the court is expected to use this sentencing option. The order usually lasts between three and twelve months. During this period, the offender must cooperate with the panel and fulfil agreed obligations. Successful completion can reduce the likelihood of reoffending.


The purpose of the referral order is to promote rehabilitation and personal responsibility. It recognizes that young offenders often benefit more from guidance and support than from purely punitive measures. By involving victims, communities, and families, the process seeks to repair harm and encourage positive behaviour. The order reflects modern principles of restorative justice. As a result, it remains a key element of youth sentencing policy.

KembaraXtra – Legal Terms – Referential Settlement


A referential settlement is a settlement document that incorporates terms from an earlier settlement. The incorporation may occur with or without modifications to the original terms. Instead of repeating all provisions, the later settlement refers back to the earlier agreement. This approach can simplify drafting and reduce duplication. It is commonly used where parties wish to preserve existing arrangements while making limited changes.


The effectiveness of a referential settlement depends on clear drafting. The parties must identify precisely which earlier terms are incorporated. Ambiguity may lead to disputes concerning the scope and meaning of the settlement. Courts generally seek to interpret the documents together. The objective is to determine the parties’ true intentions.


Difficulties can arise when the earlier and later settlements contain inconsistent provisions. One document may appear to modify or contradict the other. In such cases, the court must determine which provision should prevail. This often requires careful examination of the wording, context, and purpose of both documents. Interpretation can become highly complex.


Referential settlements are frequently used in commercial and trust-related contexts. They allow parties to maintain continuity while updating particular obligations or rights. Businesses may use them when restructuring contractual relationships. Trusts and family arrangements may also rely on referential settlements to preserve existing frameworks. Their flexibility makes them a useful legal tool.


Despite their advantages, referential settlements require meticulous drafting. Lawyers must ensure that incorporated provisions remain accurate and compatible with new terms. Failure to do so may create uncertainty and litigation. Clear cross-referencing and consistent language are essential. Properly drafted, a referential settlement can efficiently achieve the parties’ objectives.

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Malaysian Banking Law – Banking Secrecy, Customer Confidentiality, Implied Consent, Extra-Territorial Disclosure and Permitted Disclosure under Sections 132–134 of the Financial Services Act 2013 and Common Law
Introduction
Banking secrecy is one of the cornerstones of the banker-customer relationship. Customers entrust banks with highly confidential information relating to their finances, assets, liabilities and transactions. The law therefore imposes a duty upon banks to preserve the confidentiality of such information.
The objectives of banking secrecy are:

• To protect the privacy rights of customers;
• To promote confidence in the banking system; and
• To ensure that customers may conduct their financial affairs without fear of unauthorised disclosure.

In Malaysia, banking secrecy is principally governed by sections 132, 133 and 134 of the Financial Services Act 2013 (FSA 2013), which replaced sections 97 to 101 of the Banking and Financial Institutions Act 1989 (BAFIA).
However, confidentiality is not merely statutory. It is also recognised as an implied term of the banker-customer contract and protected under common law principles.
Consequently, a breach of confidentiality may expose a bank or its officers to:

• Criminal liability;
• Regulatory sanctions; and
• Civil liability.

The courts have further clarified important issues concerning:

• Ownership of the confidentiality privilege;
• Implied consent to disclosure;
• Accidental disclosures;
• Cross-border disclosures; and
• Disclosure compelled by law.

1. Restriction on Inquiry into Customer Affairs (Section 132 FSA 2013)
General Rule
Section 132 protects customers against arbitrary inquiries into their banking affairs.
Neither the Minister of Finance nor Bank Negara Malaysia (BNM) may ordinarily investigate the affairs or accounts of a specific customer.
This provision safeguards customer privacy and prevents unnecessary governmental intrusion into banking relationships.
Exception
BNM may inquire into a customer’s affairs when necessary for exercising its statutory powers under:

• The Financial Services Act 2013;
• The Islamic Financial Services Act 2013; or
• The Central Bank of Malaysia Act 2009.

Thus, confidentiality is protected but remains subject to legitimate regulatory supervision.


2. Statutory Duty of Secrecy (Section 133 FSA 2013)
General Rule
Section 133 imposes a statutory duty of secrecy upon:

• Financial institutions;
• Directors;
• Officers;
• Employees;
• Agents; and
• Former directors, officers and agents.

These persons must not disclose any information relating to a customer’s affairs or account.
The duty continues even after employment or office has ended.


Scope of Protection
The duty covers:

• Account balances;
• Transaction records;
• Fixed deposits;
• Financing facilities;
• Credit information;
• Securities holdings;
• Customer identities;
• Financial standing; and
• All information acquired through the banking relationship.

Criminal Liability
A person who unlawfully discloses customer information commits an offence punishable by:

• Imprisonment up to five years;
• Fine up to RM10 million; or
• Both.

3. Banking Secrecy as an Implied Contractual Duty
Apart from statute, confidentiality is also an implied term of the banker-customer contract.
Important Malaysian cases include:

• Tan Eng Seong v Malayan Banking Bhd
• Wong Yeng Mun v CIMB Bank Berhad
• Tan Lay Soon v Kam Mah Theatre Sdn Bhd

These authorities establish that confidentiality may be protected independently of statutory provisions.


Tan Eng Seong v Malayan Banking Bhd [1997] MLJU 36
Principle
Disclosure of customer information to a customer’s brother constituted a breach of the implied contractual duty of confidentiality.
The case confirms that:

• Confidentiality is an implied term of the banker-customer contract.
• Disclosure to relatives may still constitute unauthorised disclosure.
• Nominal damages may be awarded even where financial loss is minimal.

Wong Yeng Mun v CIMB Bank Berhad [2010] MLJU 414
Principle
The bank mistakenly sent account statements to an incorrect address where they were opened by the customer’s new wife.
The court held the bank liable.
The case confirms that:

• Confidentiality belongs to the customer.
• Administrative negligence may amount to a breach.
• Banks must implement safeguards to protect customer information.

Tan Lay Soon v Kam Mah Theatre Sdn Bhd (Malayan United Finance Bhd, Intervener) [1990] 2 MLJ 482
Principle
The court held that banking confidentiality belongs to the customer.
The customer may expressly or impliedly consent to disclosure.
Where a customer authorises sale proceeds to be used to redeem a charge, disclosure necessary to complete that transaction is permissible.
The case confirms that banking secrecy cannot be used as a shield to frustrate transactions authorised by the customer.


4. Extra-Territorial Effect of Banking Secrecy
A significant question arose concerning whether Malaysian banking secrecy laws apply outside Malaysia.
This issue was considered in:
Attorney General of Hong Kong v Lorrain Esme Osman & Ors [1994] 3 MLJ 480
and
Attorney General of Hong Kong v Zauyah Wan Chik & Ors and another appeal [1995] 2 MLJ 620
These decisions are among the most important Malaysian authorities concerning the territorial limits of banking secrecy legislation.


Attorney General of Hong Kong v Zauyah Wan Chik & Ors and Another Appeal [1995] 2 MLJ 620
Facts
The applicants were officers of Bank Bumiputra Malaysia Berhad.
They were required to testify in criminal proceedings taking place in Hong Kong involving George Tan.
Earlier, the Malaysian High Court had ordered production of evidence under the Bankers’ Books (Evidence) Act 1949.
The applicants feared that giving evidence in Hong Kong regarding customer information might breach section 97(1) of BAFIA 1989 (now replaced by section 133 FSA 2013).
The High Court initially held that disclosure in Hong Kong would breach BAFIA because the statutory protection granted by Malaysian law only applied when evidence was given in Malaysian courts.
The matter proceeded to the Court of Appeal.


Held (Court of Appeal)
The Court of Appeal reversed the High Court’s decision.
The court held that section 97 BAFIA was not expressed to have extra-territorial effect.
Accordingly, disclosure made in a foreign court could not create criminal liability under Malaysian law.
The witnesses could therefore lawfully testify in Hong Kong without fear of criminal prosecution in Malaysia.


Judgment of Gopal Sri Ram JCA
The learned judge stated that section 97 BAFIA was not intended to operate outside Malaysia.
Consequently, disclosure made in Hong Kong could not form the basis of criminal liability in Malaysia because the statute lacked extra-territorial application.


Judgment of NH Chan JCA
NH Chan JCA went further and considered possible civil liability.
The learned judge held that witnesses compelled by law to answer questions in court possess a legitimate excuse for disclosure.
Where disclosure is required by law, the witness may rely upon that legal obligation as a defence against any claim for breach of confidence.


Relationship with Section 132 of the Evidence Act 1950
A crucial aspect of the decision involved section 132 of the Evidence Act 1950.
Section 132 abolishes the common law privilege against self-incrimination in Malaysian proceedings.


Section 132(1)
A witness cannot refuse to answer a relevant question merely because the answer may:

• Incriminate him;
• Expose him to penalties;
• Expose him to forfeiture; or
• Subject him to civil proceedings.

The witness is legally required to answer.


Section 132(2)
Although compelled to answer, the witness receives protection.
Any answer given under compulsion:

• Cannot be used to prosecute the witness;
• Cannot lead to arrest;
• Cannot be used against the witness in criminal proceedings;

except where the witness gives false evidence.


Section 132(3)
Before compelling an answer that may incriminate the witness, the court must explain the protection available under section 132(2).


Legal Principle from Zauyah Wan Chik
The case establishes several important principles:
Banking Secrecy Statutes Are Territorial
Section 97 BAFIA (and by implication its successor provisions) does not automatically apply outside Malaysia unless Parliament expressly provides otherwise.
Disclosure Pursuant to Foreign Court Proceedings May Be Lawful
Where witnesses are legally compelled to testify before a foreign court, disclosure does not automatically create criminal liability in Malaysia.
Compliance with Legal Duty Is a Defence
Where disclosure is compelled by law, a witness possesses a legitimate excuse and may rely on that obligation as a defence against allegations of breach of confidence.
Banking Secrecy Is Not Absolute
Confidentiality must yield where disclosure is required by the administration of justice.


Case Scenario: Evidence in a Foreign Court
Facts
A Malaysian bank officer is subpoenaed to testify in a fraud trial before the High Court of Singapore.
The testimony requires disclosure of information relating to a Malaysian customer’s account.
The officer fears prosecution in Malaysia for breaching section 133 FSA 2013.


Solution
Applying Attorney General of Hong Kong v Zauyah Wan Chik:

• The disclosure occurs outside Malaysia.
• Section 133 FSA 2013 does not expressly provide extra-territorial criminal effect.
• The officer is testifying pursuant to a lawful court order.
• Compliance with the foreign court’s order constitutes a legitimate excuse.

The officer should not incur criminal liability merely for complying with the foreign court’s legal process.


Critical Analysis
The decision reflects an important practical reality.
Modern banking frequently involves:

• International transactions;
• Cross-border investigations;
• Foreign litigation; and
• International cooperation between regulators.

If Malaysian banking secrecy laws automatically criminalised all foreign disclosures, international judicial cooperation would become extremely difficult.
The Court of Appeal therefore adopted a practical interpretation that balances confidentiality with the needs of international justice.


5. Permitted Disclosures under Section 134 and Schedule 11 FSA 2013
Section 134 recognises that confidentiality is not absolute.
Disclosure is permitted where:

• The customer consents;
• Probate or estate administration is involved;
• Bankruptcy or winding-up proceedings arise;
• Litigation involving the bank occurs;
• Garnishee proceedings are commenced;
• Court orders are issued;
• Enforcement agencies require information;
• Tax investigations are conducted;
• Regulatory supervision is exercised;
• Outsourcing, auditing and due diligence functions are performed; or
• Criminal activity is suspected.

Key Examination Principles
Section 132 FSA 2013

• Restricts arbitrary inquiries into customer affairs.
• Protects customer privacy.
• Permits BNM investigations for statutory purposes.

Section 133 FSA 2013

• Creates a statutory duty of secrecy.
• Applies to banks and banking personnel.
• Covers all customer information.
• Breach may result in criminal sanctions.

Section 134 FSA 2013

• Creates exceptions to secrecy.
• Permits disclosure in specified circumstances.

Tan Eng Seong Principle

• Confidentiality is an implied contractual duty.
• Disclosure to relatives may constitute breach.

Wong Yeng Mun Principle

• Confidentiality belongs to the customer.
• Negligent disclosure may create liability.

Tan Lay Soon Principle

• Confidentiality belongs to the customer.
• Consent may be express or implied.
• Disclosure necessary to implement an authorised transaction is lawful.

Zauyah Wan Chik Principle

• Banking secrecy statutes are not automatically extra-territorial.
• Foreign court disclosures do not automatically create criminal liability in Malaysia.
• Compliance with lawful court orders provides a legitimate excuse for disclosure.
• Confidentiality must sometimes yield to the administration of justice.

Conclusion
Malaysian banking secrecy law protects customer information through a combination of statutory provisions and common law principles. Sections 132–134 of the Financial Services Act 2013 establish a comprehensive framework regulating confidentiality, while cases such as Tan Eng Seong, Wong Yeng Mun, Tan Lay Soon, and Attorney General of Hong Kong v Zauyah Wan Chik clarify the limits and operation of that protection. Together, these authorities establish that confidentiality belongs to the customer, may be waived expressly or impliedly, does not ordinarily extend beyond Malaysia’s territorial jurisdiction, and must occasionally yield to legal obligations imposed by courts and the administration of justice. Banking secrecy therefore remains a fundamental protection, but not an absolute one.

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Malaysian Banking Law – Banking Secrecy, Customer Confidentiality, Implied Consent and Permitted Disclosure under Sections 132–134 of the Financial Services Act 2013 and Common Law
Introduction
Banking secrecy is one of the most fundamental obligations imposed upon a bank in its relationship with customers. Customers entrust banks with highly sensitive information concerning their accounts, assets, liabilities, transactions and financial affairs. In return, the law requires banks to maintain strict confidentiality over such information.
The duty of confidentiality serves two essential purposes:

• Protecting the privacy rights of customers; and
• Preserving public confidence in the banking system.

In Malaysia, banking secrecy is principally governed by sections 132, 133 and 134 of the Financial Services Act 2013 (FSA 2013). These provisions establish a statutory duty of secrecy while simultaneously recognising circumstances in which disclosure is legally justified.
However, banking secrecy is not merely statutory. Malaysian courts have consistently recognised that confidentiality is also an implied term of the banker-customer contract. Accordingly, unauthorised disclosure may result in:

• Criminal liability under the FSA 2013;
• Regulatory sanctions; and
• Civil liability for breach of contract.

The protection extends to all information obtained by virtue of the banker-customer relationship and is not limited merely to account balances or transaction records.


1. Restriction on Inquiry into Customer Affairs (Section 132 FSA 2013)
General Rule
Section 132 protects customers from arbitrary inquiries into their banking affairs.
Neither the Minister of Finance nor Bank Negara Malaysia (BNM) may ordinarily inquire into the affairs or account of a specific customer.
The purpose is to safeguard customer privacy and prevent unnecessary interference with banking relationships.
Exception
BNM may investigate customer accounts where necessary for exercising its powers under:

• The Financial Services Act 2013;
• The Islamic Financial Services Act 2013; or
• The Central Bank of Malaysia Act 2009.

Therefore, customer confidentiality is protected but not at the expense of effective financial regulation.


2. Statutory Duty of Secrecy (Section 133 FSA 2013)
General Rule
Section 133(1) imposes a strict statutory duty of confidentiality upon:

• Financial institutions;
• Directors;
• Officers;
• Employees;
• Agents; and
• Former directors, officers and agents.

These persons must not disclose any document or information relating to the affairs or account of a customer.
The duty continues even after employment or office has ended.


Scope of Protection
The protection covers:

• Savings and current accounts;
• Fixed deposits;
• Financing facilities;
• Securities and investments;
• Customer identities;
• Credit information;
• Financial standing;
• Account balances;
• Transaction histories; and
• All information acquired through the banking relationship.

The duty extends beyond information appearing in account records and encompasses all information obtained through dealings with the customer.


Criminal Liability
Unauthorised disclosure constitutes a criminal offence punishable by:

• Imprisonment up to five years;
• A fine up to RM10 million; or
• Both.

3. Prohibition Against Further Disclosure (Section 133(3))
The law also prohibits further dissemination of information obtained through an unlawful disclosure.
A person who knowingly receives confidential customer information that has been improperly disclosed cannot further disclose that information to others.
This provision prevents banking secrecy from being undermined through indirect disclosures.


4. Banking Secrecy as an Implied Contractual Duty
Apart from statutory obligations, confidentiality is recognised as an implied term of the banker-customer contract.
This means that a customer may bring a civil action against a bank even if:

• No criminal prosecution occurs;
• No regulatory action is taken; or
• The disclosure falls outside the statutory framework.

Important Malaysian authorities include:

• Tan Eng Seong v Malayan Banking Bhd [1997] MLJU 36
• Wong Yeng Mun v CIMB Bank Berhad [2010] MLJU 414
• Tan Lay Soon v Kam Mah Theatre Sdn Bhd (Malayan United Finance Bhd, Intervener) [1990] 2 MLJ 482

These cases collectively explain the nature, ownership and limits of banking confidentiality.


Tan Eng Seong v Malayan Banking Bhd [1997] MLJU 36
Facts
The plaintiff verbally instructed the bank to close his account but failed to provide the written instructions required by bank procedures.
The account therefore remained active and accumulated service charges.
A bank officer subsequently informed the plaintiff’s brother about the outstanding balance.
The plaintiff sued for breach of confidentiality.
Held
The court held that the account had not been properly closed because no written instruction was given.
Although the statement was not defamatory, disclosure to the plaintiff’s brother constituted a breach of the implied duty of confidentiality.
The plaintiff was awarded nominal damages.
Legal Principle
The case establishes that:

• Banking confidentiality is an implied contractual obligation.
• Disclosure to family members may constitute a breach.
• Confidentiality may be protected even where the customer suffers minimal financial loss.

Wong Yeng Mun v CIMB Bank Berhad [2010] MLJU 414
Facts
CIMB mistakenly sent the plaintiff’s bank statements to an incorrect residential address.
The statements contained information concerning an account involving the plaintiff and his son from an earlier marriage.
The statements were opened and read by the plaintiff’s new wife.
The plaintiff sued for breach of confidentiality.
Held
The court held that CIMB was liable for breaching its duty of confidentiality.
However, exemplary damages were not awarded.
Legal Principle
The court emphasised that:

• The privilege of confidentiality belongs to the customer.
• Banks must take reasonable steps to ensure confidential information reaches only authorised persons.
• Negligent disclosure can constitute a breach even without deliberate misconduct.

Significance
The case demonstrates that confidentiality may be breached not only through intentional disclosure but also through administrative negligence.
The bank’s duty requires positive steps to safeguard customer information.


Tan Lay Soon v Kam Mah Theatre Sdn Bhd (Malayan United Finance Bhd, Intervener) [1990] 2 MLJ 482
Facts
The defendant company had allegedly agreed to sell certain land to the plaintiff.
The land was charged to Malayan United Finance Bhd.
The sale documentation contained an express authorisation permitting part of the purchase price to be used to settle the outstanding debt owed to the financier so that the charge could be discharged.
A dispute subsequently arose and litigation commenced.
The plaintiff sought an injunction to preserve the land pending trial.
The financier argued that granting the injunction would require disclosure of the amount owed by the defendant under the charge.
According to the financier, such disclosure would breach section 97 of the Banking and Financial Institutions Act 1989 (the predecessor of section 133 FSA 2013).


Held
The court rejected the financier’s argument.
The court held that the privilege of confidentiality belonged to the customer, namely the defendant chargor.
By expressly authorising the purchase price to be used to discharge the outstanding debt, the defendant had effectively consented to the disclosure of information necessary for that purpose.
The consent was at least implied, if not expressly given.
Furthermore, the plaintiff would effectively act as the defendant’s agent or receiver for the limited purpose of paying off the debt secured by the charge.
The court also noted that the financier had already commenced legal proceedings and obtained an order for sale of the land, thereby disclosing the existence of the debt in any event.


Legal Principle
The case establishes several important principles:
Confidentiality Belongs to the Customer
The privilege of banking confidentiality belongs to the customer and not to the bank.
The bank cannot invoke confidentiality for its own benefit where the customer has authorised disclosure.
Consent May Be Express or Implied
Consent need not always be expressly stated.
Where a customer’s conduct or contractual arrangements necessarily contemplate disclosure, consent may be implied.
Disclosure Necessary to Give Effect to a Transaction Is Permissible
Where disclosure is necessary to implement a transaction authorised by the customer, banking secrecy will not prevent such disclosure.
Confidentiality Cannot Be Used as a Shield Against Legitimate Proceedings
A customer cannot rely on banking secrecy to prevent disclosure that is necessary to enforce rights already contemplated by the customer’s own agreements.


Significance of Tan Lay Soon
This case is particularly important because it clarifies the ownership of the confidentiality privilege.
Together with Wong Yeng Mun v CIMB Bank Berhad, it confirms that:

• Confidentiality belongs to the customer.
• The customer may waive confidentiality.
• Waiver may occur expressly or by implication.
• Banks cannot insist upon secrecy where the customer has authorised disclosure.

The decision also illustrates that banking secrecy must operate realistically within commercial transactions.
Where disclosure is necessary to complete a sale, discharge a charge, or facilitate payment of an outstanding debt, confidentiality cannot be invoked to frustrate the transaction.


Case Scenario: Implied Consent to Disclosure
Facts
Ali agrees to sell charged property to Bala.
The sale agreement expressly provides that part of the purchase price will be paid directly to XYZ Bank to redeem Ali’s outstanding financing facility.
During completion, Bala requests confirmation of the redemption sum from XYZ Bank.
Ali later argues that disclosure of the redemption amount breaches banking secrecy.
Solution
Applying Tan Lay Soon, Ali’s argument fails.
By agreeing that the sale proceeds would be used to redeem the financing facility, Ali has impliedly authorised disclosure of the amount necessary to complete the redemption.
The disclosure is therefore lawful.
Critical Analysis
Banking secrecy exists to protect customers, not to obstruct commercial transactions authorised by those customers.
Where disclosure is necessary to implement a transaction contemplated by the customer, the law recognises implied consent.


5. Permitted Disclosures under Section 134 and Schedule 11 FSA 2013
Although secrecy is the general rule, section 134 creates statutory exceptions.
Disclosure is permitted where:

• The customer provides written consent;
• Probate or estate administration is involved;
• Bankruptcy or winding-up proceedings arise;
• Litigation involving the bank exists;
• Garnishee proceedings are commenced;
• A court order is issued;
• An enforcement agency requests information under written law;
• Disclosure is required for tax, regulatory or supervisory purposes;
• Credit reporting obligations arise;
• Outsourcing, auditing or due diligence functions are performed;
• Criminal conduct is suspected.

These exceptions recognise that confidentiality cannot operate as an absolute barrier to justice, regulation and legitimate commercial activity.


Key Examination Principles
Section 132 FSA 2013

• Restricts arbitrary inquiries into customer affairs.
• Protects customer privacy.
• Permits BNM investigations for statutory purposes.

Section 133 FSA 2013

• Creates a statutory duty of secrecy.
• Applies to banks and their personnel.
• Covers all customer information.
• Continues after employment ends.
• Breach may result in imprisonment and substantial fines.

Section 134 FSA 2013

• Creates exceptions to confidentiality.
• Allows disclosure under Schedule 11.
• Allows disclosure with BNM approval.
• Protects confidentiality during court proceedings.

Tan Eng Seong Principle

• Confidentiality is an implied contractual term.
• Disclosure to family members may amount to breach.
• Nominal damages may be awarded.

Wong Yeng Mun Principle

• Confidentiality belongs to the customer.
• Administrative negligence may amount to breach.
• Banks must protect customer information.

Tan Lay Soon Principle

• Confidentiality belongs to the customer, not the bank.
• Customers may waive confidentiality.
• Waiver may be express or implied.
• Disclosure necessary to implement an authorised transaction is lawful.
• Banking secrecy cannot be used to frustrate legitimate commercial arrangements authorised by the customer.

Conclusion
Under Malaysian Banking Law, banking secrecy is protected through a combination of statutory provisions and common law principles. Sections 132–134 of the Financial Services Act 2013 establish a comprehensive framework governing confidentiality, while cases such as Tan Eng Seong, Wong Yeng Mun, and Tan Lay Soon demonstrate how the courts balance customer privacy against commercial reality, regulatory requirements and the administration of justice. These authorities collectively establish that confidentiality belongs to the customer, may be waived by the customer either expressly or impliedly, and may give rise to both criminal and civil liability when breached. Ultimately, banking secrecy remains a cornerstone of the banker-customer relationship, but it is a protection designed to serve customers rather than an instrument to obstruct lawful transactions or legal proceedings.

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Malaysian Banking Law – Banking Secrecy, Customer Confidentiality and Permitted Disclosure under Sections 132–134 of the Financial Services Act 2013 and Common Law
Introduction
Banking secrecy is one of the most fundamental obligations imposed upon a bank in its relationship with customers. Customers entrust banks with highly sensitive financial information and expect that information concerning their accounts, transactions, assets, liabilities and financial affairs will remain confidential.
The duty of confidentiality serves two important objectives. First, it protects the privacy rights of customers. Secondly, it preserves public confidence in the banking system by assuring customers that their personal financial affairs will not be disclosed without authority.
In Malaysia, banking secrecy is principally governed by sections 132, 133 and 134 of the Financial Services Act 2013 (FSA 2013). These provisions establish a statutory framework regulating customer confidentiality and prescribe circumstances in which disclosure may lawfully occur.
However, banking secrecy is not solely statutory in nature. Malaysian courts have consistently recognised that confidentiality is also an implied term of the banker-customer contract. Consequently, unauthorised disclosure may expose a bank to:

• Criminal liability under the FSA 2013;
• Regulatory consequences; and
• Civil liability for breach of the implied contractual duty of confidentiality.

The duty extends beyond account balances and transaction records. It encompasses all information acquired by a bank through its banking relationship with a customer.


1. Restriction on Inquiry into Customer Affairs (Section 132 FSA 2013)
General Rule
Section 132 protects customers from arbitrary inquiries into their banking affairs.
Neither the Minister of Finance nor Bank Negara Malaysia (BNM) is generally authorised to investigate the affairs or accounts of a specific customer merely out of curiosity or convenience.
The purpose of this restriction is to preserve customer privacy and prevent unnecessary governmental intrusion into banking relationships.


Exception
Customer confidentiality must sometimes yield to legitimate regulatory concerns.
Accordingly, section 132(2) empowers BNM to investigate customer accounts where necessary for the exercise of its powers and functions under:

• The Financial Services Act 2013;
• The Islamic Financial Services Act 2013; or
• Section 47 of the Central Bank of Malaysia Act 2009.

Case Scenario 1: BNM Investigation
Facts
ABC Bank detects suspicious transactions involving a customer who appears to be moving substantial sums through multiple accounts.
BNM requires the bank to disclose account statements and transaction records as part of an anti-money laundering investigation.
The customer objects on the ground of banking secrecy.
Solution
The objection fails.
Section 132(2) expressly authorises BNM to investigate customer affairs for regulatory purposes.
The bank may lawfully disclose the information.
Critical Analysis
This provision demonstrates that banking secrecy is not absolute.
The law seeks to balance:

• Individual privacy rights; and
• The broader public interest in maintaining the integrity of the financial system.

2. Statutory Duty of Secrecy (Section 133 FSA 2013)
General Rule
Section 133(1) imposes a strict duty of secrecy upon:

• Financial institutions;
• Directors;
• Officers;
• Employees;
• Agents; and
• Former directors, officers and agents.

These persons must not disclose any information or document relating to the affairs or account of a customer.
Importantly, the duty survives termination of employment or office.


Scope of Protection
The protection extends to:

• Savings accounts;
• Current accounts;
• Fixed deposits;
• Financing facilities;
• Securities holdings;
• Credit information;
• Customer identities;
• Account balances;
• Transaction histories;
• Financial standing; and
• Any information obtained through banking dealings.

The protection is not confined to information appearing in bank statements.
Rather, all information acquired through the banking relationship is protected.


Criminal Liability
A person who unlawfully discloses customer information commits a criminal offence.
The penalty may include:

• Imprisonment for up to five years;
• A fine of up to RM10 million; or
• Both.

Exceptions under Section 133(2)
The statutory duty does not apply where:
(a) Disclosure to BNM
Information is disclosed to BNM for the exercise of its statutory functions.
(b) Statistical or Aggregated Information
Information is disclosed in a manner that does not identify any particular customer.
(c) Public Information
Information has already been lawfully disclosed to the public from a source other than the bank.


Case Scenario 2: Disclosure by a Bank Employee
Facts
A bank officer discovers that a celebrity maintains RM20 million in her account.
He reveals this information to several friends.
The information subsequently appears on social media.
Solution
The officer has breached section 133(1).
The information was acquired solely through the banking relationship and remains confidential.
The officer may face criminal prosecution and disciplinary sanctions.
Critical Analysis
The confidence reposed in banks would be severely undermined if employees could freely reveal customer information.
The provision therefore serves as an essential safeguard for customer trust.


3. Prohibition Against Further Disclosure (Section 133(3))
Section 133(3) extends protection beyond the initial disclosure.
A person who knowingly receives information disclosed in breach of section 133(1) is prohibited from further disclosing that information.
The objective is to prevent confidential information from continuing to circulate after the original breach.


Case Scenario 3: Secondary Disclosure
Facts
A bank employee unlawfully discloses customer information to a journalist.
The journalist knows the information was obtained unlawfully but publishes it nonetheless.
Solution
The journalist may also be liable under section 133(3).
Critical Analysis
The law seeks to prevent both:

• The original disclosure; and
• Subsequent dissemination.

Without such protection, confidentiality could easily be circumvented through intermediaries.


4. Banking Secrecy as an Implied Contractual Duty
Apart from the statutory framework, confidentiality is also recognised as an implied term of the banker-customer contract.
This means that a customer may bring a civil action for breach of confidentiality even where no criminal prosecution is initiated.
Two important Malaysian authorities are:

• Tan Eng Seong v Malayan Banking Bhd [1997] MLJU 36
• Wong Yeng Mun v CIMB Bank Berhad [2010] MLJU 414

These cases demonstrate that banking confidentiality protects private customer rights independently of statutory provisions.


Tan Eng Seong v Malayan Banking Bhd [1997] MLJU 36
Facts
The plaintiff was a former employee of the defendant bank.
After leaving employment, he orally informed the bank that he wished to close his account.
However, he did not provide the written instructions required by the bank’s procedures.
The account therefore remained active and accumulated approximately RM15 in charges.
A bank credit officer subsequently informed the plaintiff’s brother about the outstanding amount.
The plaintiff commenced legal proceedings alleging breach of confidentiality.


Held
The court held that the account remained open because the plaintiff failed to submit the required written instructions.
Although the statement made by the bank officer was not defamatory, the disclosure constituted a breach of the implied duty of confidentiality.
The plaintiff succeeded and was awarded nominal damages of RM15.


Legal Principle
The case establishes that:

• Banking confidentiality exists as an implied contractual obligation.
• Disclosure to relatives may still amount to unauthorised disclosure.
• A customer may succeed even where actual financial loss is minimal.
• Confidentiality is valuable in itself and deserving of legal protection.

Wong Yeng Mun v CIMB Bank Berhad [2010] MLJU 414
Facts
The plaintiff maintained a banking account with CIMB Bank.
The account concerned financial arrangements involving the plaintiff and his son from a previous marriage.
CIMB mistakenly sent the plaintiff’s bank statements to an incorrect residential address.
The statements were subsequently opened and read by the plaintiff’s new wife.
As a result, confidential banking information relating to the plaintiff became known to an unauthorised third party.
The plaintiff brought an action against the bank for breach of banking confidentiality.


Held
The court held that CIMB was liable for breaching its duty of confidentiality.
By sending the bank statements to the wrong address, the bank failed to protect the confidentiality of the customer’s banking information.
However, the court declined to award exemplary damages.


Legal Principle
The court reaffirmed that:

• Banking confidentiality belongs to the customer.
• The privilege of confidentiality is a customer right and not a bank right.
• A bank must take reasonable precautions to ensure customer information is delivered only to authorised recipients.
• Negligent disclosure may constitute a breach of banking secrecy even where there is no deliberate wrongdoing.

Significance of Wong Yeng Mun
The importance of this case lies in its recognition that confidentiality can be breached through carelessness as well as intentional disclosure.
Unlike cases involving deliberate leaks by employees, the bank’s wrongdoing arose from an administrative failure.
The decision demonstrates that banks must implement effective systems and procedures to safeguard customer information.
A bank cannot avoid liability merely because the disclosure was accidental.


Case Scenario 4: Statement Sent to Wrong Address
Facts
A bank updates Ahmad’s mailing address incorrectly due to an administrative error.
Monthly account statements are sent to a stranger’s home and are opened by the recipient.
The stranger learns details of Ahmad’s savings and financing facilities.
Solution
Applying Wong Yeng Mun, the bank is likely liable for breach of confidentiality.
Although the disclosure was accidental, the bank failed to ensure the secure transmission of customer information.
Critical Analysis
The duty of confidentiality requires more than merely refraining from deliberate disclosure.
It also requires banks to adopt reasonable operational safeguards to prevent unauthorised access to customer information.


Case Scenario 5: Disclosure to a Family Member
Facts
Ali verbally requests closure of his account but does not complete the bank’s written closure form.
The account remains active and incurs service charges.
A bank officer later informs Ali’s sister about the outstanding balance.
Ali sues the bank.
Solution
Applying Tan Eng Seong, the account remains active because the required closure procedure was not followed.
However, the disclosure to Ali’s sister constitutes a breach of the implied contractual duty of confidentiality.
Critical Analysis
The case confirms that family members are legally third parties unless authorised by the customer.
Banks cannot assume that disclosure to relatives is permissible.


5. Permitted Disclosures (Section 134 FSA 2013)
Although secrecy is the general rule, section 134 recognises that disclosure may sometimes be necessary.
A bank may disclose customer information:

• Under Schedule 11; or
• With the written approval of BNM.

These exceptions ensure that banking secrecy does not obstruct justice, regulation or legitimate commercial activities.


The 18 Permitted Disclosures under Schedule 11
The principal exceptions include:
Customer Consent
Disclosure authorised in writing by the customer.
Administration of Deceased Estates
Disclosure for probate, letters of administration, Faraid certificates and distribution orders.
Bankruptcy and Winding-Up
Disclosure to bankruptcy trustees and liquidators.
Litigation Involving the Bank
Disclosure necessary for legal proceedings involving the bank.
Garnishee Orders
Disclosure required to comply with garnishee proceedings.
Court Orders
Disclosure pursuant to court orders issued by courts not lower than the Sessions Court.
Enforcement Agency Requests
Disclosure to law enforcement authorities conducting investigations.
Other Permitted Disclosures
Disclosure relating to:

• PIDM functions;
• Securities Commission investigations;
• Stock exchange functions;
• Inland Revenue Board investigations;
• Credit reporting agencies;
• Supervisory authorities;
• Centralised group functions;
• Outsourcing arrangements;
• Consultants and adjusters;
• Due diligence exercises; and
• Suspicion of criminal activities.

Confidentiality During Court Proceedings
Section 134 also empowers courts to protect customer information during legal proceedings.
The court may:

• Conduct proceedings in camera;
• Restrict access to documents;
• Issue confidentiality orders; and
• Prohibit publication of identifying information.

These safeguards ensure that disclosure remains limited to what is necessary for the administration of justice.


Jeyamary Case
Facts
A bank officer printed customer account information and gave it to a private investigator.
The information eventually reached a blogger.
Decision
The bank officer was convicted and sentenced to:

• Two days’ imprisonment; and
• RM20,000 fine.

Principle
The duty of confidentiality extends to all information obtained through the banking relationship.


Johari and Rafizi (National Feedlot Corporation Case)
Facts
A bank clerk disclosed confidential banking information relating to the National Feedlot Corporation to politician Rafizi Ramli.
Both were initially convicted and sentenced to imprisonment before later being acquitted.
Principle
The case highlights the ongoing tension between:

• Banking secrecy; and
• Public interest disclosures.

Key Examination Principles
Section 132

• Protects customers from arbitrary inquiries.
• Restricts governmental interference.
• Permits BNM investigations where authorised by statute.

Section 133

• Creates a statutory duty of secrecy.
• Applies to banks, employees, officers, directors and agents.
• Continues after employment ends.
• Covers all information acquired through banking dealings.
• Breach may result in imprisonment and substantial fines.

Section 134

• Creates exceptions to secrecy.
• Permits disclosures listed in Schedule 11.
• Permits disclosures approved by BNM.
• Allows courts to preserve confidentiality during litigation.

Tan Eng Seong Principle

• Confidentiality is an implied contractual term.
• Disclosure to relatives may amount to breach.
• Nominal damages may be awarded even without substantial loss.

Wong Yeng Mun Principle

• Confidentiality belongs to the customer.
• Accidental disclosures may still create liability.
• Banks must maintain effective safeguards for customer information.
• Negligence in handling customer documents can constitute a breach of confidentiality.

Conclusion
Under Malaysian Banking Law, banking secrecy is protected through both statutory and contractual mechanisms. Sections 132–134 of the Financial Services Act 2013 impose strict obligations of confidentiality while recognising carefully defined exceptions necessary for regulatory supervision, law enforcement and the administration of justice. Malaysian case law, particularly Tan Eng Seong v Malayan Banking Bhd and Wong Yeng Mun v CIMB Bank Berhad, further confirms that confidentiality is an implied term of the banker-customer relationship. These authorities demonstrate that a bank may incur liability not only for deliberate disclosures but also for careless handling of customer information. Ultimately, the law treats banking confidentiality as a cornerstone of the banker-customer relationship and an essential component of public confidence in the Malaysian banking system.

​

Malaysian Banking Law – Banking Secrecy, Confidentiality and Permitted Disclosure under Sections 132–134 of the Financial Services Act 2013
Introduction
Banking secrecy is one of the most important obligations imposed upon a bank in its relationship with customers. A customer who deposits money with a bank expects that information concerning his accounts, transactions, financial position and dealings with the bank will remain confidential.
The duty of confidentiality serves two important functions. First, it protects the privacy rights of customers. Secondly, it promotes public confidence in the banking system by assuring customers that their financial affairs will not be disclosed indiscriminately.
In Malaysia, banking secrecy is principally governed by sections 132, 133 and 134 of the Financial Services Act 2013 (FSA 2013). These provisions impose a statutory duty of secrecy upon banks and their personnel while also recognising circumstances in which disclosure is necessary and legally justified.
Importantly, the duty of confidentiality is not derived solely from statute. Malaysian courts have recognised that confidentiality is also an implied contractual term in the banker-customer relationship. Therefore, a bank may face both criminal liability under the FSA 2013 and civil liability for breach of contract where customer information is disclosed without authority.
The protection extends beyond account balances and transaction records. It includes all information obtained by the bank through the banking relationship, whether acquired directly from account records or through dealings with the customer.


1. Restriction on Inquiry into Customer Affairs (Section 132 FSA 2013)
General Rule
Section 132 protects customers from arbitrary inquiries into their banking affairs.
The provision states that neither the Finance Minister nor Bank Negara Malaysia (BNM) is generally authorised to investigate the affairs or accounts of a specific customer of a financial institution.
The objective is to prevent unnecessary intrusion into private banking relationships and preserve customer confidentiality.


Exception
Section 132(2) recognises that confidentiality cannot obstruct regulatory oversight.
Accordingly, BNM may inquire into a customer’s affairs where such inquiry is necessary for exercising its powers and functions under:

• The Financial Services Act 2013;
• The Islamic Financial Services Act 2013; or
• Section 47 of the Central Bank of Malaysia Act 2009.

Thus, while customer privacy is protected, it must yield where legitimate regulatory supervision is required.


Case Scenario 1: BNM Investigation
Facts
ABC Bank notices suspicious transactions involving a customer who appears to be moving large sums of money through multiple accounts.
BNM commences an investigation and requires the bank to disclose the customer’s account statements and transaction records.
The customer objects, claiming that the information is protected by banking secrecy.
Solution
The customer’s objection will fail.
Section 132(2) expressly permits BNM to investigate customer accounts when exercising its statutory functions.
The bank may therefore provide the requested information without breaching its confidentiality obligations.
Critical Analysis
This provision demonstrates that banking secrecy is not absolute.
The law seeks to balance:

• Individual privacy; and
• The public interest in combating money laundering, terrorism financing and financial crime.

Without such powers, effective regulation of the financial system would be impossible.


2. Statutory Duty of Secrecy (Section 133 FSA 2013)
General Rule
Section 133(1) imposes a strict statutory duty of secrecy.
The duty applies to:

• Financial institutions;
• Directors;
• Officers;
• Employees;
• Agents; and
• Former directors, officers and agents.

These persons are prohibited from disclosing any document or information relating to the affairs or account of a customer.
The obligation continues even after employment or office has ceased.


Scope of Protection
The protection afforded by section 133 is broad.
It covers:

• Savings accounts;
• Current accounts;
• Fixed deposits;
• Financing facilities;
• Credit information;
• Account balances;
• Transaction histories;
• Customer identities;
• Financial standing;
• Information obtained through banking dealings.

The protection is not limited to information appearing in account statements.
Any information acquired because of the banking relationship is protected.


Criminal Liability
A person who unlawfully discloses customer information commits an offence.
Upon conviction, the offender may be liable to:

• Imprisonment for up to five years;
• A fine of up to RM10 million; or
• Both imprisonment and a fine.

The severity of these penalties reflects the importance attached to banking confidentiality.


Exceptions under Section 133(2)
The duty of secrecy does not apply in the following situations:
(a) Disclosure to BNM
Information disclosed to BNM for purposes connected with the exercise of its statutory functions.
(b) Statistical or Aggregated Information
Information disclosed in summary form where no particular customer can be identified.
For example, a bank may publish statistics indicating that it has 100,000 savings account holders without revealing individual customer identities.
(c) Public Information
Information that has already been lawfully made available to the public from a source other than the bank.
For example, where a listed company voluntarily publishes information regarding its banking arrangements in its annual report.


Case Scenario 2: Disclosure by a Bank Employee
Facts
A bank officer discovers that a celebrity maintains RM20 million in her account.
The officer reveals this information to friends and acquaintances.
The information subsequently spreads through social media.
Solution
The bank officer has breached section 133(1).
The information was obtained solely through the banking relationship and remains confidential.
The officer may be subjected to criminal prosecution, disciplinary action and possible civil liability.
Critical Analysis
The banking industry depends heavily on public trust.
If customers cannot trust bank employees to preserve confidentiality, confidence in the banking system will be seriously undermined.


3. Prohibition Against Further Disclosure (Section 133(3))
Section 133(3) extends protection beyond the original disclosure.
A person who knowingly receives information that has been disclosed in breach of section 133(1) is prohibited from further disclosing that information.
The provision prevents confidential information from continuing to circulate after the initial breach.


Case Scenario 3: Secondary Disclosure
Facts
A bank employee unlawfully discloses customer information to a journalist.
The journalist is aware that the information was obtained illegally.
Nevertheless, the journalist publishes the customer’s banking details.
Solution
The journalist may also be liable under section 133(3) because he knowingly disclosed information obtained through an unlawful disclosure.
Critical Analysis
The law aims to suppress both:

• The original leak; and
• Any subsequent dissemination.

Otherwise, banking secrecy could easily be defeated through intermediaries.


4. Banking Secrecy as an Implied Contractual Duty
Although sections 132–134 create statutory obligations, confidentiality also exists as an implied term of the banker-customer contract.
This means that a customer may bring a civil action against the bank even where criminal proceedings are not commenced.
The leading Malaysian authority is Tan Eng Seong v Malayan Banking Bhd [1997] MLJU 36.


Tan Eng Seong v Malayan Banking Bhd [1997] MLJU 36
Facts
The plaintiff was formerly employed by Malayan Banking Berhad.
After leaving the bank’s employment, he verbally informed the bank that he wished to close his account.
However, he failed to provide the written instruction required by the bank’s procedures.
Because no written authorisation was received, the bank continued to regard the account as active.
Over time, service charges and interest accumulated, resulting in an outstanding balance of approximately RM15.
Subsequently, a credit officer informed the plaintiff’s brother about the existence of the outstanding amount.
The plaintiff then sued the bank for breach of confidentiality.


Held
The court held that the account had not been properly closed because the plaintiff failed to submit the required written instructions.
The court also found that the statement made by the credit officer was not defamatory.
However, the court recognised that the disclosure of the plaintiff’s banking information to his brother amounted to a breach of the implied duty of confidentiality arising from the banker-customer relationship.
The court was reluctant to determine whether there had been a contravention of section 97(1) of the Banking and Financial Institutions Act 1989 (the predecessor of section 133 FSA 2013).
Nevertheless, the plaintiff could succeed on the basis of the implied contractual duty of confidentiality.
The court awarded nominal damages of RM15.


Legal Principle
This case establishes that:

• Banking secrecy exists not only as a statutory obligation but also as an implied contractual duty.
• A customer may sue for breach of confidentiality even where the statutory provision is not relied upon.
• Disclosure to family members may constitute an unauthorised disclosure.
• Actual financial loss is not essential for a successful claim.

Case Scenario 4: Disclosure to a Family Member
Facts
Ali verbally requests closure of his account but does not complete the bank’s written closure form.
The account remains active and incurs RM50 in service charges.
A bank officer later informs Ali’s sister about the outstanding balance.
Ali sues the bank.
Solution
Following Tan Eng Seong, the account remains active because the required written instructions were not submitted.
However, the disclosure to Ali’s sister constitutes a breach of the implied contractual duty of confidentiality.
Ali may therefore recover damages despite suffering minimal financial loss.
Critical Analysis
The case demonstrates that confidentiality extends even against disclosures made to close relatives.
A customer’s spouse, sibling, parent or child remains a third party unless authorised by the customer or permitted by law.
The decision reinforces the principle that privacy, rather than financial loss, lies at the heart of banking confidentiality.


5. Permitted Disclosures (Section 134 FSA 2013)
Although secrecy is the general rule, section 134 recognises that disclosure may sometimes be necessary.
A bank may disclose customer information:

• Under Schedule 11; or
• With the written approval of BNM.

The purpose of these exceptions is to ensure that banking secrecy does not obstruct justice, regulatory supervision or legitimate commercial activities.


The 18 Permitted Disclosures under Schedule 11
The principal permitted disclosures include:
1. Customer’s Written Consent
A bank may disclose information where written consent has been given by:

• The customer;
• The executor or administrator of the customer’s estate; or
• A legal representative of an incapacitated customer.

Case Scenario
A customer authorises his bank to provide financial information to another bank when applying for a housing loan.
Solution
The disclosure is lawful because the customer expressly consented.
Critical Analysis
The right to confidentiality belongs to the customer and may therefore be waived by the customer.


2. Administration of a Deceased Customer’s Estate
Disclosure is permitted for obtaining:

• Faraid certificates;
• Grants of probate;
• Letters of administration; or
• Distribution orders.

Case Scenario
The administrator of a deceased customer’s estate requests details of the deceased’s bank accounts.
Solution
The bank may lawfully disclose the information.


3. Bankruptcy and Winding-Up Proceedings
Disclosure is permitted where the customer is bankrupt or undergoing liquidation.
Case Scenario
A bankruptcy trustee seeks information concerning the bankrupt’s accounts.
Solution
The bank may disclose the information.
Critical Analysis
The trustee must identify assets for distribution among creditors.
Public interest outweighs confidentiality concerns.


4. Litigation Involving the Bank
Disclosure is permitted in civil or criminal proceedings involving:

• The bank and its customer;
• Guarantors or sureties;
• Competing claimants; or
• Property over which the bank has rights.

Case Scenario
A customer sues the bank for wrongfully dishonouring a cheque.
Solution
The bank may disclose relevant account information to defend the claim.


5. Garnishee Proceedings
Banks may disclose information when complying with garnishee orders.
Case Scenario
A judgment creditor obtains a garnishee order against funds held in a customer’s account.
Solution
The bank may provide the necessary information.


6. Court Orders
Disclosure is permitted pursuant to a court order issued by a court not lower than the Sessions Court.
Case Scenario
The High Court orders a bank to produce customer account statements.
Solution
The bank must comply.


7. Requests by Enforcement Agencies
Disclosure is permitted where required by law enforcement agencies conducting investigations.
Case Scenario
MACC requests customer account records during a corruption investigation.
Solution
The bank may lawfully disclose the information.


8–18 Other Permitted Disclosures
Disclosure is also permitted for:

• PIDM functions;
• Securities Commission investigations;
• Stock exchange functions;
• Trade repositories;
• Inland Revenue Board investigations;
• Credit reporting agencies;
• Supervisory authorities;
• Centralised group functions;
• Due diligence exercises;
• Outsourcing arrangements;
• Consultants and adjusters;
• Suspected criminal offences.

Confidentiality During Court Proceedings
Section 134 provides additional safeguards where customer information is disclosed in legal proceedings.
The court may:

• Conduct proceedings in camera;
• Restrict access to confidential information;
• Make further confidentiality orders;
• Prohibit publication of names, addresses, photographs or identifying information.

Critical Analysis
These safeguards ensure that disclosure remains limited to what is necessary for the administration of justice.


Jeyamary Case
Facts
A bank officer printed a customer’s account information and provided it to a friend who was a private investigator.
The information was later passed to a blogger.
Decision
The bank officer was convicted and sentenced to:

• Two days’ imprisonment; and
• RM20,000 fine.

Legal Principle
Banking secrecy extends beyond account balances and transaction records.
It encompasses all confidential information obtained through the banking relationship.
Critical Analysis
The case illustrates the strict approach adopted by Malaysian courts toward unauthorised disclosures.
Even seemingly minor disclosures may attract criminal sanctions.


Johari and Rafizi (National Feedlot Corporation Case)
Facts
A bank clerk disclosed confidential banking information relating to the National Feedlot Corporation to politician Rafizi Ramli.
Both individuals were initially convicted and sentenced to thirty months’ imprisonment but were later acquitted.
Legal Principle
The case highlights the tension between:

• Banking secrecy; and
• Public interest disclosure.

Critical Analysis
Although public accountability is important, banking information remains protected unless disclosure falls within recognised legal exceptions.
The case demonstrates the sensitivity of customer banking information and the serious legal consequences that may follow unauthorised disclosure.


Key Examination Principles
Section 132

• Protects customers from arbitrary inquiries.
• Restricts governmental intrusion into banking affairs.
• Allows BNM investigations for statutory purposes.

Section 133

• Creates a statutory duty of secrecy.
• Applies to banks, directors, officers, employees and agents.
• Continues after employment ends.
• Covers all information obtained through the banking relationship.
• Breach may result in imprisonment of up to five years or a fine of up to RM10 million.

Section 134

• Creates statutory exceptions to secrecy.
• Permits disclosure under Schedule 11.
• Permits disclosure with BNM’s written approval.
• Allows courts to impose confidentiality safeguards.

Tan Eng Seong Principle

• Banking confidentiality is also an implied contractual duty.
• Customers may sue for breach of confidentiality.
• Disclosure to relatives may still be unlawful.
• Nominal damages may be awarded even where financial loss is minimal.

Conclusion
Under Malaysian Banking Law, banking secrecy is protected by both statute and contract. Sections 132–134 of the Financial Services Act 2013 establish a comprehensive statutory framework regulating customer confidentiality, while cases such as Tan Eng Seong v Malayan Banking Bhd confirm that confidentiality is also an implied term of the banker-customer relationship. Consequently, unauthorised disclosure may expose a bank or its employees to criminal penalties, regulatory consequences and civil liability. The law therefore strikes a careful balance between protecting customer privacy and allowing disclosure where required for regulatory supervision, law enforcement, judicial proceedings and other legitimate public interests.

​

Malaysian Banking Law – Banking Secrecy under the Financial Services Act 2013 (Sections 132–134 FSA 2013)
Introduction
Banking secrecy is one of the most fundamental duties owed by a bank to its customer. The duty requires a bank to keep confidential all information relating to a customer’s affairs and accounts. This obligation promotes public confidence in the banking system and protects customers’ privacy.
In Malaysia, banking secrecy is governed principally by sections 132, 133 and 134 of the Financial Services Act 2013 (FSA 2013). These provisions impose a statutory duty of confidentiality on banks and their officers while simultaneously providing specific exceptions where disclosure is legally permitted.
The duty extends beyond account balances and transactions. It covers all information obtained by the bank through the banker-customer relationship, whether obtained directly from the account records or through other dealings with the customer.


1. Restriction on Inquiry into Customer Affairs (Section 132 FSA 2013)
General Rule
Section 132 provides that neither the Finance Minister nor Bank Negara Malaysia (BNM) may arbitrarily inquire into the affairs or accounts of a particular customer.
The purpose of this provision is to safeguard customer privacy and prevent unnecessary governmental interference in banking relationships.
Exception
BNM may investigate a customer’s account where such inquiry is necessary for exercising its statutory powers under:

• The Financial Services Act 2013;
• The Islamic Financial Services Act 2013; or
• Section 47 of the Central Bank of Malaysia Act 2009.

Thus, customer confidentiality is protected, but not at the expense of financial regulation and supervision.


Case Scenario 1: BNM Investigation
Facts
ABC Bank suspects that one of its customers is involved in large-scale money laundering activities.
BNM commences an investigation and requires the bank to provide account records and transaction details of the customer.
The customer argues that his banking information is confidential and cannot be disclosed.
Solution
The customer’s argument fails.
Under section 132(2), BNM is expressly empowered to inquire into a customer’s affairs when exercising its regulatory and supervisory functions.
The bank may therefore disclose the information to BNM without violating banking secrecy obligations.
Critical Analysis
Banking secrecy is not absolute.
The law balances two competing interests:

1. Customer privacy; and
2. Public interest in preventing financial crimes.

Without this exception, regulators would be unable to combat money laundering, terrorism financing and banking fraud effectively.


2. Statutory Duty of Secrecy (Section 133 FSA 2013)
General Rule
Section 133(1) imposes a strict duty of secrecy on:

• Financial institutions;
• Directors;
• Officers;
• Employees;
• Agents; and
• Former directors, officers or agents.

These persons must not disclose any document or information relating to a customer’s affairs or account to another person.
The obligation continues even after employment or office has ended.


Scope of Protection
The duty covers:

• Account balances;
• Transaction records;
• Loan facilities;
• Fixed deposits;
• Customer identities;
• Financial standing;
• Credit information;
• Information obtained through banking dealings.

The duty applies whether the information was acquired directly from account records or indirectly through the banking relationship.


Criminal Liability
A person who unlawfully discloses customer information commits an offence.
Penalty:

• Imprisonment up to 5 years;
• Fine up to RM10 million; or
• Both.

Exceptions under Section 133(2)
The secrecy obligation does not apply where:
(a) Disclosure to BNM
Information is disclosed to BNM for the exercise of its statutory functions.
(b) Statistical or Aggregated Information
Information is presented in summary form without identifying individual customers.
Example:
A bank publishes:
“Our bank has 100,000 savings account holders.”
No individual customer can be identified.
(c) Public Information
Information already lawfully available to the public from another source.
Example:
A listed company publicly discloses its banking arrangements in its annual report.


Case Scenario 2: Employee Reveals Customer Information
Facts
A bank officer discovers that a famous celebrity has RM20 million in her account.
The officer informs several friends about the celebrity’s financial position.
The information later spreads on social media.
Solution
The officer has breached section 133(1).
The disclosure concerns confidential customer information obtained through employment with the bank.
The officer may face criminal prosecution and disciplinary action.
Critical Analysis
The statutory duty protects public confidence in banks.
If bank employees could freely disclose customer information, customers would lose trust in the banking system and may hesitate to conduct financial transactions through banks.


3. Prohibition Against Further Disclosure (Section 133(3))
Section 133(3) extends the protection even further.
A person who knows that information was obtained through an unlawful disclosure cannot further disclose that information.
This prevents confidential information from continuing to circulate after the original breach.


Case Scenario 3: Secondary Disclosure
Facts
A bank employee unlawfully gives customer information to a journalist.
The journalist knows that the information was leaked illegally.
The journalist publishes the customer’s account details.
Solution
The journalist may also fall within section 133(3) because he knowingly disclosed information that had been unlawfully obtained.
Critical Analysis
The law seeks to stop both:

• The initial leak; and
• Subsequent dissemination.

Otherwise, banking secrecy could easily be circumvented by passing information through intermediaries.


4. Permitted Disclosures (Section 134 FSA 2013)
Although secrecy is the general rule, section 134 creates exceptions.
A bank may disclose customer information:

1. Under Schedule 11; or
2. With written approval from BNM.

These exceptions recognise that banks cannot operate effectively if secrecy is absolute.


The 18 Permitted Disclosures under Schedule 11


1. Customer Consent
Disclosure is permitted where the customer gives written consent.
Case Scenario
A customer applies for a housing loan from another bank and signs a consent form authorising disclosure of his account information.
Solution
The disclosure is lawful because the customer expressly consented.
Critical Analysis
Customer autonomy justifies disclosure.
The right to privacy belongs to the customer and may therefore be waived by the customer.


2. Administration of Deceased Customer’s Estate
Disclosure is permitted for:

• Faraid certificates;
• Probate applications;
• Letters of administration;
• Distribution orders.

Case Scenario
A deceased customer’s son seeks information regarding his father’s bank accounts for probate proceedings.
Solution
The bank may disclose the relevant information.


3. Bankruptcy or Winding-Up Proceedings
Disclosure is permitted where a customer becomes bankrupt or a company is wound up.
Case Scenario
A bankruptcy trustee requests details of the bankrupt’s bank accounts.
Solution
The bank may disclose the information.
Critical Analysis
The trustee must identify and recover assets for creditors.
The public interest outweighs confidentiality concerns.


4. Civil or Criminal Proceedings Involving the Bank
Disclosure is allowed in litigation involving:

• The bank and its customer;
• Guarantors;
• Sureties;
• Competing claimants.

Case Scenario
A customer sues a bank for wrongly dishonouring a cheque.
Solution
The bank may disclose account records necessary to defend itself.
Critical Analysis
A bank must be able to protect its legal rights.
Without this exception, the bank would be unable to defend litigation effectively.


5. Garnishee Orders
Banks may disclose information when complying with garnishee proceedings.
Case Scenario
A judgment creditor obtains a garnishee order against a customer’s account.
Solution
The bank may reveal account information necessary to comply with the court order.


6. Court Orders
Disclosure is permitted where ordered by a court not lower than the Sessions Court.
Case Scenario
The High Court orders a bank to produce account statements during litigation.
Solution
The bank must comply.
Critical Analysis
The administration of justice requires access to relevant evidence.


7. Requests by Enforcement Agencies
Disclosure may be made to enforcement agencies investigating offences.
Case Scenario
The Malaysian Anti-Corruption Commission (MACC) requests account records during a corruption investigation.
Solution
The bank may lawfully disclose the information.


8–18 Other Permitted Disclosures
Disclosure is also allowed for:

• Functions of the Malaysia Deposit Insurance Corporation (PIDM);
• Securities Commission investigations;
• Stock exchange functions;
• Trade repository functions;
• Inland Revenue Board tax investigations;
• Credit reporting agencies;
• Supervisory authorities;
• Centralised group functions (audit, risk management, IT);
• Mergers and acquisitions due diligence;
• Outsourcing arrangements;
• Consultants and adjusters;
• Suspicion of criminal offences.

Confidentiality During Court Proceedings
Under section 134(5), courts may:

• Conduct proceedings in camera (private hearings);
• Restrict disclosure of customer information;
• Make additional confidentiality orders.

Under section 134(6), publication of names, addresses, photographs or identifying information may also be prohibited.
Critical Analysis
These provisions preserve confidentiality even after disclosure becomes necessary in litigation.
The objective is to disclose only what is necessary while minimising harm to customer privacy.


Jeyamary Case (Bank Officer Disclosure)
Facts
A bank officer printed a customer’s account particulars and gave them to a friend who was a private investigator.
The information was later passed to a blogger.
Decision
The bank officer was convicted and sentenced to:

• Two days’ imprisonment; and
• RM20,000 fine.

Legal Principle
Banking secrecy extends beyond account balances and transactions.
It includes all confidential information acquired through the banking relationship.
Critical Analysis
The case demonstrates that even seemingly minor disclosures can attract criminal liability because public confidence in the banking system depends upon strict confidentiality.


Johari and Rafizi Case (National Feedlot Corporation)
Facts
A bank clerk disclosed confidential banking information concerning the National Feedlot Corporation (NFC) to politician Rafizi Ramli.
Both individuals were initially convicted and sentenced to 30 months’ imprisonment.
They were subsequently acquitted.
Legal Principle
The case highlights the tension between:

• Banking confidentiality; and
• Public interest disclosures.

Critical Analysis
Although public accountability is important, banking information cannot ordinarily be disclosed outside the statutory exceptions provided by law. The case illustrates the sensitivity of customer banking information and the legal consequences that may arise from unauthorised disclosure.


Key Examination Principles
Section 132

• Protects customer accounts from arbitrary inquiry.
• Allows BNM investigations when exercising statutory powers.

Section 133

• Imposes a statutory duty of secrecy.
• Applies to banks, directors, officers and agents.
• Covers all customer-related information.
• Continues after employment ends.
• Breach may result in imprisonment up to 5 years or a fine up to RM10 million.

Section 134

• Provides exceptions to secrecy.
• Permits disclosure under Schedule 11.
• Permits disclosure with written approval from BNM.

Schedule 11
Contains 18 specific situations where disclosure is lawful, including:

• Customer consent;
• Probate matters;
• Bankruptcy proceedings;
• Court orders;
• Enforcement investigations;
• Tax authorities;
• Credit reporting agencies;
• Outsourcing and group functions;
• Suspicion of criminal offences.

Conclusion
Under Malaysian Banking Law, the default position is strict confidentiality of customer information. Sections 132–134 of the FSA 2013 create a comprehensive statutory framework that protects customer privacy while allowing disclosure where required by law, regulation, judicial process, or public interest considerations. The legislation carefully balances individual confidentiality rights against the needs of law enforcement, financial regulation, taxation, insolvency administration, and the administration of justice. Cases such as Jeyamary and the NFC controversy demonstrate that unauthorised disclosure can carry serious legal consequences and that banking secrecy remains a cornerstone of the Malaysian banking system.

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KembaraXtra – Legal Terms – Referendum on Continued Membership of the European Union


The Referendum on Continued Membership of the European Union was held in the United Kingdom on 23 June 2016. It was authorized by the European Referendum Act 2015. Voters were asked whether the United Kingdom should remain a member of the European Union or leave it. The referendum represented one of the most significant constitutional events in modern British history. It generated intense political, economic, and social debate.


The referendum attracted substantial public participation. Approximately 72.2 percent of eligible voters cast ballots. The final result showed that 52 percent voted to leave the European Union, while 48 percent voted to remain. This outcome became widely known as “Brexit.” The result reflected deep divisions across regions, generations, and political groups within the United Kingdom.


A major legal question arose regarding the constitutional effect of the referendum. Specifically, it was unclear whether the result was legally binding or merely advisory. This issue reached the courts in the case commonly known as Miller (No. 1). The Supreme Court ruled that the government could not trigger withdrawal from the European Union without parliamentary authorization. An Act of Parliament was therefore required.


Following the decision, Parliament enacted the European Union (Notification of Withdrawal) Act 2017. This legislation authorized the government to begin the withdrawal process under Article 50 of the Treaty on European Union. Formal notification was subsequently given to the European Union. Negotiations then commenced concerning the terms of withdrawal. These negotiations lasted several years and involved complex legal and political issues.


The United Kingdom officially left the European Union on 31 January 2020. A transition or implementation period continued until 31 December 2020. During that period, many EU rules continued to apply while new arrangements were finalized. The referendum and its aftermath fundamentally reshaped the constitutional and legal relationship between the United Kingdom and the European Union. Its effects continue to influence British law and politics today.

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