Bank, subsidiary to pay RM1.16mil credited to wrong company

The Kuala Lumpur High Court has found a local bank and its subsidiary responsible for transferring RM1.16 million to the wrong company, causing significant financial loss to Yat Fatt Auto Supplies Sdn Bhd. The error occurred due to a mismatch in account details within the bank's online banking system, Bizsmart. The court awarded Yat Fatt RM1.16 million in damages and ordered the bank and its subsidiary to pay RM50,000 in legal costs.

The incident took place in 2024 when RM1.23 million was erroneously transferred to a party known as Banarsi Das Trade instead of the intended recipient, Perodua Sales Sdn Bhd. Despite Yat Fatt's efforts to halt the payments, the bank informed them that the funds had already been transferred to a different account. It was only later revealed that the money had indeed been sent to Banarsi Das Trade.

Yat Fatt only received RM69,303.53 back. The court noted that the bank's requirement for account number and payee's name as part of its payment architecture was insufficient, as it lacked a mechanism to identify inconsistencies, which could have prevented the error.