(AFP) Banks have been told to report any "suspicious transactions" amid allegations that terror suspect Osama bin Laden had accounts here under a fictitious name.

Bank Negara Malaysia, without naming Osama, said banking institutions should not be associated with any form of criminal activity.

"The use of the banking system for criminal purposes is prohibited under guidelines issued by Bank Negara Malaysia," it said in a statement late yesterday.

Banking institutions were subject to "know your customer" requirements in opening and maintaining accounts and were "required to submit reports on suspicious transactions to Bank Negara Malaysia".

Local newspapers said Osama, named by the US as a "prime suspect" in the attacks on the US last week, was believed to have kept accounts for his al-Qaeda organisation here, Hong Kong, Dubai and London.

Presence confirmed

The information was reportedly provided by a witness in the trial of four men accused of the 1998 bombings of the US embassies in Kenya and Tanzania.

The police confirmed yesterday that suspects in last week's terrorist attacks on New York and Washington had recently been here.

The government has pledged co-operation with the US and said it would not shelter groups with terrorism on their agenda irrespective of whether they were locals or foreigners.