Governance requirementAgenda
10.45am • Briefing on PENJANA Tourism Fund and other SME Funds
available for MSBs
• Updates by MAMSB on its initiatives in supporting licensees to
transform to digitalized services
11.30 am • Sharing on regulatory relief to ease impact of COVID-19 on the
MSB industry
11.45 am • Reminders on statistical reporting and other COVID-19 related
matters
6 months ( 131 )
changers
business, and plan to do so in next 12 months..
( 89 )
salary
( 43 )
become agents
30% of staff
compliance for profitability to
illegal operators during
• MSB now more susceptible to ML/TF risk and illicit activities
… aggravated by failure in obtaining financial assistance from
commercial banks (SRF loan approval rate at 2.7%)
Industry seeks assistance from the Bank in industry
recovery and business transformation
• Easing of borrowing / loan approvals (including removal of
MSB as ‘avoid sector’)
suspension of minimum capital fund requirements
• Relaxed compliance and AML/CFT implementation to reduce
compliance cost
especially rampant now
impacted, posing possible systemic risk if prolonged
• most impacted due to near-zero money-
changing activities – more than 50% stress tested with
risk of financial distress in 2 years should pandemic
impact persist
border movement and foreign worker
retrenchment/ salary cut
disruption (heavier reliance on LWS for currency
sourcing and clearing during pandemic)
MSB struggled to stay afloat amid COVID-19 disruption, affecting business survivability
LMC
RSP
LWS
*April year-on-year comparison
Digitalisation is key in ‘new normal’, with consolidation for cost-sharing and economies of scale
Rise of cashless tourism expenditure in the country What digital means
End-to-end
digital
process
One-stop
shop
Multi-
channels
Seamless
customer
experience
• Creative and personalised MSB
business models and customer
Revolut) by foreign tourists
as tourists go cashless
currency exchange
arrivals in 2019
MSB players leveraged on digital MSB services to sustain operations during MCO
digitalized services including e-KYC
Estimated cost for digitalisation:
RM1m- RM5m for end-to-end
digital MSBs able to
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.. whilst maintaining compliance to preserve trust and reputation of the MSB industry
2018 - 2019
PTF for MSBs to support business transformation in the new normal
PENJANA Tourism Fund (PTF)
Fund objective To support SMEs in the tourism sectors by preserving their capacity and assisting them
to undertake the necessary investment to adjust and remain viable post-Covid-19
Total allocation RM1 billion
Eligibility criteria MSBs who are SMEs that conduct money-changing business - Special Relief Facility’s (SRF) and PENJANA SME Financing’s (PSF) recipients are not eligible for PTF
Purpose of financing Working capital and/or capital expenditure (CAPEX) - Financing cannot be used for refinancing of existing credit/financing facilities
Financing tenure Max 7 years with at least 6 months moratorium on monthly instalment
Financing size Maximum of RM300,000 per SME and RM75,000 per microenterprise
Financing rate Up to 3.5% p.a. inclusive of guarantee fee
- Guarantee coverage of 80% (at 0.5% fee) for SMEs & 90% (at 0.5% fee) for microenterprises
Collateral Not required
• Digitalisation of business models for seamless customer experience (online currency
booking and e-payment); or
• Strategic consolidation plans (e.g. M&A, consortium) to embark on digital solution; or
• Synergistic business collaboration with other business sectors in offering digital MSB
solution
12 Participating FIs: Affin, Alliance, Ambank, CIMB, Hong Leong, Maybank, Public
Bank, RHB, Bank Islam, Bank Muamalat,
SME Bank & BSN
Automation and Digitalisation Facility (ADF) MDEC matching grants
SME Business Digitalisation Grant
Smart Automation Grant (SAG)
business operation.
with ceiling limit of RM200,000
• Matching grant for businesses to
subscribe to services by technology
service providers (TSP) identified by
MDEC in order to adopt digitalisation.
• 50% matching grant of up to RM5,000
for subscription of TSP services.
Fund objective To incentivise SMEs to automate processes and
digitalise operations to increase productivity and
efficiency
Purpose of
hardware and software, IT solutions and services,
technology support services and other intangible
assets to enhance productivity and efficiency • Financing cannot be used for refinancing of existing
credit/financing facilities
Financing tenure Max 10 years from date of first drawdown
Financing size Maximum of RM3 million per SME
Financing rate Up to 4.0% p.a. inclusive of guarantee fee
Availability Until 31 Dec 2020
PENJANA Tourism Financing & MDEC Collaboration
Dated 4 August 2020
3.Question & Answer Session
PTF & MDEC Collaboration
SME PTF Applications
•The Association’s members can start applying for working capital financing.
•You can start completing the “application kit” and compiling the required documents including latest audited financial statements and certified bank statements for the last 6 months.
•The documents to be submitted (“application kit”) for SME Bank are per e-mail dated 24 July 2020 - customer information form, SME bank application form and document check list.
•It will be to the benefit of Members to submit the application kit and requisite documents to the Association. The Secretariat shall then review the documents for completeness before submitting the applications (by batches) to the designated officer at SME Bank, Head Office. The Secretariat’s plan is to submit the documents to SME Bank every Friday of the week, starting with 7 August 2020.
PTF & MDEC Collaboration
MDEC Collaboration
The Association will be collaborating with MDEC on digitalising the MSB industry which will entail the following elements:
•Development of a specific digitalisation programme/road map to assist licensees in their digitalisation journey; and
•Financial assistance for the digitalization journey in the form of grants managed by MDEC for SMEs i.e. SME Digital Grant and Smart Automation Grant (SAG).
PTF & MDEC Collaboration
SME Digital Grant: A 50% matching grant of up to RM5,000 per company to eligible Small & Medium Enterprises to adopt digitalization in daily operations. Please refer to the following link for further details: https://mdec.my/digital-economy-initiatives/for-the- industry/sme-digitalisation-grant/
PTF & MDEC Collaboration
MDEC Collaboration
(Cont’d)
A brief on the said grants are as follows (Cont’d):
Smart Automation Grant: A grant of up to 50% of the total project cost, subject to a ceiling limit up to RM200,000 made available to SMEs and mid-tier companies in the services sector. Please refer to the following link for further details: https://mdec.my/digital-economy-initiatives/for-the- industry/smart-automation-grant/
PTF & MDEC Collaboration
Question & Answer Session
PTF & MDEC Collaboration
Staff training expenditure • All licensees are exempted from the STE requirement for 2020
Notwithstanding this, licensees are strongly encouraged to send staff for training including e-learnings for staff to remain competent and effective in carrying out their roles and responsibilities
(a circular on this will be issued soon)
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Annual licence fees • Annual fee payment is waived for 2020 (A regulation on this was gazetted on 1 June 2020. It was communicated via email on 5 June 2020)
Completion of: • MSB Director’s Education
Programme (MSB-DEP) • CO accreditation
• The completion timelines are extended to the following: MSB-DEP: Till end-2022 CO accreditation: Till end-2021
Requirements Reliefs
Minimum capital funds • Licensees must observe the minimum capital funds at all times.
• Nonetheless, the Bank will accord due consideration to licensees who are unable to meet the requirement due to the pandemic, subject to valid justifications.
Regulatory reliefs and initiatives to ease impact of COVID-19 on the MSB industry
e-KYC for on-boarding of new customers (status quo)
Submission of annual audited accounts
• Approved licensees are reminded to ensure that all individuals on-boarded via e-KYC to use digital MSB services have bank accounts
— This is to safeguard digital MSB service against ML/TF risks by ensuring funds for the transactions are legitimate source and the transactions performed are traceable.
• For licensees with financial year ends between Dec 2019 and Apr 2020, the submission deadline is extended by 3 months from the original deadline.
Licensees are reminded to submit statistical reports in a timely and accurate
manner
Ensure timely statistical reporting, and submit outstanding reports due to MCO
• To submit all overdue reports at the soonest • For months without transaction:
• Line by line: submit blank file
• Aggregate: proceed with confirmation
Agreed Upon Procedure report
submission issues
Undertake self-checking before submission, to ensure accuracy
*To use report downloaded from ‘Previous reporting period’ tab in STATSmart
after file upload
submission • Compare the total value and volume to start
• Any discrepancies must be amended
immediately
report
e.g. 60123456789, not 6012-
24% ineffective mechanism on contact tracing
8% social distancing issue among staff
Queue line indicator Hand sanitizer Notices on Covid19
Generally, licensees are complying with most of
Covid-19 operational SOP…
Face mask Scam
Telephone
18
1
9
2 circulars issued [6 May & 29 June 2020] to alert MSB industry on the following:
Fraud: Pharmaceutical products & govt.
- Phishing (stimulus aid offered by govt.)
- Impersonation as federal officers (LHDN)
Cyber-crime
- Malware and system hacking
- Misuse of non-profit organization
access liquidity)
3. Red
no fixed income
dubious recipients
Example of reporting duplicate rows in Statsmart (MSB01/MSB02)
Where the transaction type, reporting outlet ID, customer type, nationality, country code, purpose code, currency
code are identical for multiple rows, system will only take the last entry row and disregard all the other rows.
This is observed at row 1 & 2 (hence only row 2 accepted), and 3 & 4 (only row 4 accepted), leading to under-reporting
in MSB01
Customer
Details
Amount (RM)
1 CO XXXXX0110001 IN MY ID 21220-Workers Remittances IDR 10 10000 50
2 CO XXXXX0110001 IN MY ID 21220-Workers Remittances IDR 20 20000 30
3 CO XXXXX0110001 IN OT ID 21220-Workers Remittances IDR 5 200000 4000
4 CO XXXXX0110001 IN OT ID 21220-Workers Remittances IDR 4 400000 5000
Transaction
Type*
Amount (RM)
1 CO XXXXX0110001 IN MY ID 21220-Workers Remittances IDR 30 30000 80
3 CO XXXXX0110001 IN OT ID 21220-Workers Remittances IDR 9 600000 9000
Transaction
Type*
Important to put in place necessary checks:
Pre-file upload: ensure no duplicate rows as above during report generation
Post-file upload: compare # of rows in initial file generated vs. file downloaded from ‘previous reporting period’ tab in
STATsmart after file upload