Dispute Resolution
Banking Confidentiality and Liability: Public Bank Berhad v National Feedlot Corporation [2025] CLJU 1556
Brief facts
In this case, Public Bank Berhad appealed to the Federal Court against the decision of the Court of Appeal holding it liable for breach of banking secrecy and confidentiality in respect of the disclosure of confidential banking information.
The confidential information was revealed during a 2012 press conference by Rafizi Ramli, who shared with the press internal bank documents related to a loan application.
The Federal Court dismissed Public Bank’s appeal on liability and held the bank accountable with damages to be assessed.
Legal principles
The main issue revolved around whether a bank’s implied contractual duty of confidentiality is absolute or qualified, and whether liability should be strict or fault based.
The English common law exceptions particularly the English Court of Appeal’s decision in Tournier v National Provincial and Union Bank of England [1924] 1 KB 461, which recognises four exceptions to a bank’s duty of secrecy, and the “Quincecare duty” to exercise reasonable care and skill in Hilton v Westminster Bank Limited [1926] 135 LT 358 were discussed.
The English common law exceptions particularly the English Court of Appeal’s decision in Tournier v National Provincial and Union Bank of England [1924] 1 KB 461, which recognises four exceptions to a bank’s duty of secrecy, and the “Quincecare duty” to exercise reasonable care and skill in Hilton v Westminster Bank Limited [1926] 135 LT 358 were discussed.
The Federal Court held that common law principles on duty of banks, do not apply in determining the breach of the duty of secrecy in light of the Banking and Financial Institutions Act 1989 (“BAFIA”) which codify banks’ duty of secrecy. Specifically, sections 97(2), 98(1), and 99(1) of BAFIA set out banks’ duty of secrecy and specific statutory exceptions. Section 3(1) of the Civil Law Act 1956 limits the application of English common law where local statutes exist.
Section 97(1) of BAFIA imposes a clear duty of confidentiality on banks. A bank whose duty of secrecy is regulated by BAFIA cannot escape liability where the breach is committed by those under its employment, supervision and care. This means even if bank employees act without authorisation, in breaching confidentiality obligations, the bank is liable.
