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Malaysia Banking and Financial Institutions Act, 1989

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HomeBrud.gifMalaysia LawBrud.gifActsBrud.gifMalaysia Banking and Financial Institutions Act, 1989

Part I: PRELIMINARY

  • Section 1: Short title and commencement
  • Section 2: Interpretation
  • Section 3: Functions, powers and duties of Bank

LICENSING OF BANKING, FINANCE COMPANY, MERCHANT BANKING, DISCOUNT HOUSE AND MONEY-BROKING BUSINESSES

  • 4. Banking, finance company, merchant banking, discount house and money-broking businesses to be carried on only under licence.
  • 5. Submission of application for licence to the Bank.
  • 6. Grant or refusal of application by Minister.
  • 7. Revocation of licence.
  • 8. Imposition of restrictions in lieu of revocation of licence.
  • 9. Power to impose new conditions and to vary or revoke conditions imposed on licence under section 6 (4) or this section.
  • 10. Notice of revocation of licence, imposition of restrictions, or variation or revocation of conditions, or imposition of new conditions.
  • 11. Mandatory revocation of licence and restriction of licence in cases of emergency.
  • 12. Surrender of licence.
  • 13. Prohibition on carrying on of licensed business upon revocation, expiry of duration or surrender of licence.
  • 14. Requirements for grant and continuance of licence.
  • 15. Restriction on use of word “bank”, etc.
  • 16. Names to be affixed outside office.
  • 17. Amendment or alteration of constituent documents of licensed institution.
  • 18. Publication of list of licensed institutions.

PART III: SCHEDULED BUSINESSES AND REPRESENTATIVE OFFICES

  • 19. Requirements for commencing or carrying on scheduled business.
  • 20. Requirements for setting up or maintaining a representative office.
  • 21. Submission of documents, statements, etc.
  • 22. Amendment or alteration of constituent documents of scheduled or foreign institution.
  • 23. Restriction on use of words “building credit”, etc.
  • 24. Regulation of scheduled institutions and representative offices under Parts V, VI, VII, VIII, IX, X and XIII.

PART IV: RESTRICTIONS RELATING TO ACCEPTANCE AND SOLICITATION OF, ADVERTISEMENT FOR, AND INDUCEMENT TO MAKE, DEPOSITS

  • 25. Receiving, taking or acceptance of deposits prohibited except under and in accordance with a valid licence granted under section 6 (4).
  • 26. Unsolicited calls.
  • 27. Advertisements for deposits.
  • 28. Fraudulent inducement in relation to deposits.

PART V: SUBSIDIARIES AND OFFICES OF LICENSED INSTITUTIONS

  • 29. Control of establishment or acquisition of subsidiaries.
  • 30. Restriction on establishment of offices of licensed institutions.
  • 31. Establishment of correspondent banking relationship.

PART VI: RESTRICTIONS ON DEALINGS OF LICENSED INSTITUTIONS

  • 32. Restriction on carrying on of trade by licensed institution.
  • 33. Restriction on trading by licensed finance company, etc.
  • 34. Deposits to be subject to specified minimum or maximum period, minimum or maximum amount, and other specified terms and conditions.
  • 35. Control of advertisements issued by licensed institutions.

PART VII: FINANCIAL REQUIREMENTS AND DUTIES OF LICENSED INSTITUTIONS

  • 36. Maintenance of reserve fund.
  • 37. Maintenance of capital funds.
  • 38. Maintenance of liquid assets.
  • 39. Maintenance of assets in Malaysia.
  • 40. Appointment and duties of auditor.
  • 41. Financial statements to be submitted to Bank.
  • 42. Publication and exhibition of audited balance sheet, etc.
  • 43. Statistics and information to be submitted.
  • 44. Licence fees.

PART VIII: OWNERSHIP, CONTROL AND MANAGEMENT OF LICENSED INSTITUTIONS

  • 45. Acquisition or disposal of aggregate of five per centum holding.
  • 46. Maximum permissible holdings.
  • 47. Prohibited holdings by licensed institution.
  • 48. Saving in respect of acquisitions, disposals and holdings before effective date.
  • 49. Sanction required for reconstruction, etc. of licensed institutions.
  • 50. Application to High Court to facilitate agreement or arrangement for transfer of whole or part of business of licensed institution being given effect to.
  • 51. Licensed institution to report acquisition or disposal of aggregate of five per centum holding to Bank.
  • 52. Credit facilities on security of licensed institution’s property to be reported to Bank.
  • 53. Defence relating to contravention of provisions of this Part.
  • 54. Prohibitions and restrictions in the event of contravention.
  • 55. Bank’s consent required to be director of licensed institution.
  • 56. Disqualifications of director or officer of licensed institution.
  • 57. Appointment of chief executive.

PART IX: RESTRICTIONS ON BUSINESS OF LICENSED INSTITUTIONS

  • 58. Restrictions on payments of dividends.
  • 59. Advance against security of own shares or shares of holding company.
  • 60. Grant of secured and unsecured credit facilities.
  • 61. Restriction of credit to single customer.
  • 62. Prohibition of credit facilities to director and officer.
  • 63. Restriction on giving of credit facilities.
  • 64. Disclosure of interest by director.
  • 65. Control of credit limit.
  • 66. Restrictions on investments.
  • 67. Limitations, terms and conditions in respect of giving of credit facility, including credit facility for the purpose of financing the acquisitions of shares or immovable property.
  • 68. Proof of compliance.

PART X: POWERS OF SUPERVISION AND CONTROL OVER LICENSED INSTITUTIONS

  • 69. Examination of licensed institution.
  • 70. Power of Minister to direct investigation to be made.
  • 71. Production of licensed institution’s books, etc.
  • 72. Licensed institution unable to meet obligations to inform Bank.
  • 73. Action by Bank in respect of licensed institution in certain circumstances.
  • 74. Provisions in relation to appointment under section 73.
  • 75. Provisions in relation to removal from office under section 73 (1) (C) or (D) (i).
  • 76. Provisions relating to assumption of control under section 73 (2) (a).
  • 77. Power to reduce share capital and to cancel shares of licensed institution which is subject to an order under section 73 (2) (a).
  • 78. Loans to licensed institution and acquisition of its shares.
  • 79. Extension of jurisdiction under this Part to related corporations of licensed institution and to director controlled institutions.
  • 80. Moratorium.
  • 81. Priority of payments in the event of insolvency of licensed institution.

PART XI: INVESTIGATION, SEARCH AND SEIZURE

  • 82. Appointment of investigating officers, their powers, functions and duties.
  • 83. Powers of entry, search and seizure.
  • 84. Search of person.
  • 85. Obstruction to exercise of powers by an investigating officer.
  • 86. Requirement to provide translation.
  • 87. Power to examine persons.
  • 88. Specific persons in respect of whom powers of investigation may be exercised.
  • 89. Assistance to police or other public officer.
  • 90. Investigator deemed to be public servant and public officer.

PART XII: APPLICATION OF PARTS X AND XI TO NONSCHEDULED INSTITUTIONS ENGAGED IN PROVISION OF FINANCE

  • 91. Report to Minister in respect of non-scheduled institution.
  • 92. Powers of Minister in relation to report under section 91.
  • 93. Minister’s power to apply provisions of Part X to nonscheduled institutions.
  • 94. Power of Minister to revoke licence, etc. of non-scheduled institution.
  • 95. Provisions of this Part to prevail.

PART XIII: INFORMATION AND SECRECY

  • 96. Restriction on inquiring specifically into affairs of particular customer.
  • 97. Secrecy.
  • 98. Disclosure for facilitating performance of functions by Bank.
  • 99. Other permitted disclosures.
  • 100. Disclosure under Banker’s Books (Evidence) Act 1949.
  • 101. Examination by relevant overseas supervisory authority.
  • 102. Disclosure by Bank of information to relevant overseas supervisory authority.

PART XIV: OFFENCES

  • 103. Scheduled offences and penalties for them.
  • 104. General penalty.
  • 105. Offences in relation to entries in books, documents, etc.
  • 106. Offences by institution and by servants and agents.
  • 107. Joinder of offences.
  • 108. Power of Governor to compound offences.
  • 109. Power of officer of Bank to prosecute offences under Act with consent of Public Prosecutor.
  • 110. Offences to be seizable offences.
  • 111. Duty of investigating officer to make over arrested person to police.
  • 112. Attempts, preparations, abetments and conspiracies punishable as offences.

PART XV: GENERAL PROVISIONS

  • 113. Submission to Bank of information required by it.
  • 114. Indemnity.
  • 115. Prohibition on receipt of gifts, commissions, etc.
  • 116. Regulations.
  • 117. Decision of Minister to be final.
  • 118. Exemptions.
  • 119. (Deleted).
  • 120. Declaration of holidays.
  • 121. Compensation.
  • 122. Application of Companies Act 1965.
  • 123. Application of Exchange Control Act 1953.
  • 124. Islamic banking or financial business.
  • 125. Contravention not to affect contract, agreement or arrangement.
  • 126. Power to issue guidelines, etc.

PART XVI: AMENDMENT, REPEAL AND TRANSITIONAL PROVISIONS

  • 127. Retrospective amendment of Finance Companies Act 1969.
  • 128. Repeal of Finance Companies Act 1969 and Banking Act 1973, and savings in respect thereof.
  • 129. Savings in respect of licences granted under Banking Act 1973 and Finance Companies Act 1969.
  • 130. Modifications to construction of other written laws.
  • 131. Consequential amendments to the Companies Act 1965.

Schedules

  • First Schedule: (Section 2 (1), paragraph (D) of the definition of “deposit”)
  • Second Schedule: (Section 6 (1)) Minimum Criteria
  • Third Schedule:(Section 2 (1), definition of “scheduled business”.)
  • Fourth Schedule: (Section 103) Offences and Penalties

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