Thursday 28 Mar 2024
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This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on Nov 9 - 15, 2015.

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BANK NEGARA MALAYSIA enforced the Financial Services Regulations 2015 and Islamic Financial Services Regulations 2015 on Sept 14. The regulations, which provide for the approval, oversight and obligations of a Financial Ombudsman Scheme (FOS) in Malaysia, is part of the central bank’s efforts to strengthen consumer protection and enhance the process for resolving financial disputes. The alternative dispute resolution mechanism will commence in the first quarter of 2016.

According to Bank Negara’s press release, the regulations provide for “the periodic review of monetary limit applied to eligible disputes to ensure that it is reflective of the changes in the value of financial services or products; imposing a clear duty on directors of the FOS to act at all times in the best interests of the FOS and independently of any particular group or body which individual directors might belong to; and affirming a two-stage dispute resolution process comprising mediation and adjudication which provides ample opportunity for disputing parties to review the relevant facts, issues and disagreements in an attempt to reach an amicable agreement”. 

The regulations also state that if an agreement cannot be reached, “a decision by the ombudsman must be supported by his reasoning for the decision and is binding on the financial service provider (FSP) if accepted by the complainant”. 

Consumers can refer eligible disputes involving FSPs such as “licensed banks and Islamic banks; licensed insurers and takaful operators; prescribed development financial institutions; approved designated payment instrument issuers and designated Islamic payment instrument issuers; approved insurance and takaful brokers; and approved financial advisers and Islamic financial advisers”. The FOS services will be provided to consumers at no cost. 

Further details on the FOS are available on Bank Negara’s website.

 

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