Authorized business of the Bank
(1) In addition to the powers, functions, duties, and responsibilities conferred or imposed on the Bank by the *Ordinance, the rules made thereunder, and the by-laws of the Bank, the Bank may—
(a) make loans to, and stand guarantee for any loan of money to, any person, whether or not a member of the Bank;
(b) grant and issue letters of credit to any person, whether or not a member of the Bank;
(c) acquire, hold, issue on commission, underwrite, and deal with stock, bonds, funds, obligations, securities, and investments of all kinds;
(d) transact all manner of agency business;
(e) acquire and undertake the whole or any part of the business of any person or company carrying on any business of the same nature as the Bank may lawfully carry on, or possessed of property suitable for the purposes of the Bank;
(f) maintain accounts with other banks in Malaysia;
(g) carry on any other business expressly authorized by the Minister with the concurrence of the Minister of Finance.
(2) In exercising its powers and carrying out its functions, the Bank shall give paramount consideration to its primary objective of raising the economic status of its members.
(3) The Minister may, with the concurrence of the Minister of Finance, by order published in the Gazette exempt the Bank from any provisions of the *Ordinance or direct that any of the provisions of the *Ordinance shall apply to the Bank with such modifications as may be specified in the order.
(4) No investment exceeding the amount determined by the Minister with the concurrence of the Minister of Finance shall be made by the Board in exercise of its powers under *section 33 of the *Ordinance or under subsection (1), unless prior written approval of the Minister, given with the concurrence of the Minister of Finance, has been obtained.
*NOTE—The Cooperative Societies Ordinance 1948 has since been revised as the Cooperative Societies Act 1948 [Act 287] and later repealed by the Cooperative Societies Act 1993 [Act 502]– see paragraph 95(1)(a) of Act 502.
Restrictions on payment of dividends and grant of advances and loans to directors
(1) The Bank shall not—
(a) pay any dividend on its shares until all its capitalized expenditure, including preliminary expenses, organization expenses, share-selling commission, brokerage, amounts of losses incurred, and other items of expenditure not represented by tangible assets, has been completely written off;
(b) grant unsecured advances or unsecured loans in excess of, in the aggregate and outstanding at any one time, ten thousand ringgit to—
(i) any of its directors; or
(ii) any firm or corporation in which any of the directors of the Bank is interested as a partner, director, manager, or agent; or
(iii) any subsidiary of the Bank; or
(iv) any individual, firm, or corporation of whom or of which any of the directors of the Bank is a guarantor;
(c) grant to any of its officers or employees unsecured advances or unsecured loans in excess of, in the aggregate and outstanding at any one time, six months’ remuneration of the officer or employee.
(2) All the directors of the Bank shall be liable jointly and severally to indemnify the Bank against any loss arising from the making of any unsecured advance or unsecured loan under paragraph
(1)(b).
(3) No secured advance or loan in excess of, in the aggregate and outstanding at any one time, ten thousand ringgit shall be granted to any such person, firm, or corporation as is mentioned in paragraph (1)(b) unless the following conditions are satisfied, namely—
(a) that the borrower meets the standards of credit worthiness required of other borrowers;
(b) that the terms of the advance or loan are not less favourable to the Bank than those offered to others;
(c) that the grant of the advance or loan will serve the best interests of the Bank; and
(d) that the advance or loan has been approved by the votes of not less than two-thirds of the directors of the Bank at a duly convened meeting of the Board, and the approval has been recorded in the minutes of the meeting.
(4) In paragraph (1)(b), “director” includes the wife, husband, father, mother, son, or daughter of a director.
(5) In this section, “unsecured advances” and “unsecured loans” mean respectively advances and loans made without security or, in the case of advances and loans made with security, any portion thereof that at any time exceeds the value of the assets constituting the security.
(6) Where, in construing subsection (5), a dispute arises as to the value of any asset constituting a security, the value shall be taken to be the market value determined on the basis of a valuation approved by the Minister with the concurrence of the Minister of Finance.
*NOTE—The Cooperative Societies Ordinance 1948 has since been revised as the Cooperative Societies Act 1948 [Act 287] and later repealed by the Cooperative Societies Act 1993 [Act 502]– see paragraph 95(1)(a) of Act 502.
