This Act may be cited as the Finance (Banking and Financial Institutions) Act 1986.
Act 330
Finance (Banking and Financial Institutions) Act 1986
Akta kewangan (bank dan institusi kewangan) 1986
Text recovered by OCR from a scanned copy — section numbers and wording may be wrong. Check the official PDF on lom.agc.gov.my before citing.
An Act to amend the Central Bank of Malaysia Ordinance 1958, the Finance Companies Act 1969, the Banking Act 1973 and the Islamic Banking Act 1983.
Data synced
Text as at 1 January 2006 (LOM reprint); amendments made after that date may not be incorporated.
The *Central Bank of Malaysia Ordinance 1958 [Ord. 61 of 1958], the **Finance Companies Act 1969 [Act 6], the ***Banking Act 1973 [Act 102] and the Islamic Banking Act 1983 [Act 276] are amended in the manner specified in Chapters II, III, IV and V respectively.
*NOTE—The Central Bank of Malaysia Ordinance 1958 [Ord. 61 of 1958] has since been revised as the Central Bank of Malaysia Act 1958 [Act 519]. **NOTE—The Finance Companies Act 1969 [Act 6] has since been repealed by the Banking and Financial Institutions Act 1989 [Act 372]–see section 128 of Act 372. ***NOTE—The Banking Act 1973 [Act 102] has since been repealed by the Banking and Financial Institutions Act 1989 [Act 372]–see section 128 of Act 372.
Chapter II — Amendments to the * central bank of malaysia ordinance 1958
Section 2 of the Central Bank of Malaysia Ordinance 1958, which in this Chapter is referred to as “the Ordinance”, is amended by inserting after the interpretation of “Board” the following new interpretation of “certificate of deposit”:
‘ “certificate of deposit” means a document relating to money, in any currency, which has been deposited with the issuer or some other person, being a document which recognizes an obligation to pay a stated amount to bearer or to order, with or without interest, and being a document by the delivery of which, with or without endorsement, the right to receive that stated amount, with or without interest, is transferable;’.
Section 15 of the Ordinance is amended by inserting after subsection (4) the following new subsection (5):
“(5) Subject to section 49, the Bank may, with the approval of the Minister, out of the funds of the Bank, create and maintain a trust account to be called “the Bank Negara Malaysia Staff Welfare Account” for the benefit of its officers and employees, including their dependents.”.
Subsection (1) of section 30 of the Ordinance is amended—
(a) by substituting for the word “three” the word “twelve” wherever it appears in paragraphs (e) and (l);
(b) by substituting for the word “six” the word “twelve” in paragraph (f);
(c) by inserting after the word “months” the words “or such period as may be approved by the Minister on the
recommendation of the Board” wherever it appears in paragraphs (e), (f) and (l);
(d) by inserting after the words “the Government” the words “or the Bank” in paragraph (fff);
(e) by inserting after paragraph (mmm) the following new paragraph (mmmm): “(mmmm) establish a central bureau to collect, in such manner and to the extent as the Bank may think fit, information on and relating to rejection by a paying bank of any cheque for reason of insufficient funds in the account of the drawer of the cheque, and to disclose any such information to any bank for the purpose only of assisting the bank to assess the eligibility of the drawer to maintain or open any current account with the bank;”; and
(f) by inserting after paragraph (n) the following new paragraphs (nn) and (nnn): “(nn) place deposits in any bank or finance company licensed under the Finance Companies Act 1969 within the Federation;
(nnn) purchase, under repurchase agreements, and subject to such terms as may be approved by the Minister on the recommendation of the Bank, and sell any certificate of deposit issued by any bank or finance company licensed under the Finance Companies Act 1969;”.
*NOTE—The Central Bank of Malaysia Ordinance 1958 [Ord. 61 of 1958] has since been revised in March 1994 as the Central Bank of Malaysia Act 1958 [Act 519].
Chapter III — Amendments to the * finance companies act 1969
Subsection 3A(1) of the Finance Companies Act 1969, which in this Chapter is referred to as “the principal Act”, is amended—
(a) by inserting after the words “such person” the words “either in the National Language or in English or in any other language” wherever they appear in paragraphs (a) and (b);
(b) by substituting for the comma a fullstop at the end of paragraph (b); and
(c) by deleting the words “after 31 December 1979.” in subsection (1).
*NOTE—The Finance Companies Act 1969 [Act 6] has since been repealed by the Banking and Financial Institutions Act 1989 [Act 372]–see section 128 of Act 372.
The principal Act is amended by substituting for section 21 the following new section 21:
“Prohibition of advances, loans or credit facilities to directors, officers and employees
Subseksyen • (1) seksyen 23 Akta ibu adalah Pindaan seksyen 23. dipindaa) dengan memotong perenggan (a), (b) dai d): dar
[Bab III-V, S. 9-11] seksyen 21. Akia 102.
(b) dengan menggantikan perenggan (e) dengan perenggan (e) baru yang berikut: '(e) mana-mana perbadanan atau syarika awam yang disebut dalam subseksyeı
Seksyen 21 Akta Bank 1973 adalah dipinda-
(a) dengan memotong perkataan "dan" selepas perkataan-perkataan "Bank Negara;" hujung perenggan (ca) subseksyen (1); di b, dengan memasukkan selepas perenggan (co uDseksyen (1), perenggan baru (cb) yan berikut: *(b) wakayen (2) seksyen 36, slatu pengat. yang menunjukkan maklumat itu berhubungan dengan pelangganpelanggannya sebagaimana yang dikehendaki bagi maksud-maksud biro pusat yang ditubuhkan di bawah seksyen 30 (1) (mmmm) Ordinan Bank Negara Malaysia 1958; dan";
(c) dengan menggantikan perkataan-perkataan "perenggan (ca)" dalam subseksyen (2) dengan perkataan-perkataan "perenggan (ca) seksyen 19 Akta 276.
Seksyen 19 Akta Bank Islam 1983 adalah dipinda
(a) derkan m-peotonanperkBank "depar selepas perkataan-perkataan hujung perenggan (d) subseksyen (1);
[Bab V, S. 11) KEWANGAN (BANK DAN INSTITUSI KEWANGAN)
(b) dengan memasukkan selepas perenggan (d) subseksyen (1), perenggan baru (da) yang berikut: "(da) walau pun peruntukan subseksyen (3) seksyen 34, suatu penyata maklumat itu berhubungan dungan
(c) dengan menggantikan perkataan-perkataan "perenggan (d)" dalam subseksyen (2) dengan Pdakataan-perkatan
Chapter III — Amendments to the * finance companies act 1969
(1) Unless otherwise exempted by the Central Bank, with or without conditions, or except as provided under subsection (2) or (4), no licensed finance company shall grant advances, loans or credit facilities to—
(a) any of its directors, officers or employees or other persons being persons receiving remuneration from it (other than accountants, advocates and solicitors, architects, estate agents, doctors and any other persons receiving remuneration from it in respect of their professional services);
(b) any firm in which any of its directors, officers or employees is interested as partner, manager, agent or guarantor;
(c) any corporation in which any of its officers or employees is a director, manager, agent or guarantor, or any corporation in the shares of which any of its officers or employees has any material interest as determined by the Central Bank;
(d) any corporation in which any of its directors (not being an executive director, he being within the ambit of paragraph
(c) pursuant to subsection (3)) is a member, director, manager, agent or guarantor, or any corporation in the shares of which any such director of the licensed finance company has any interest whatsoever directly or indirectly; or
(e) any individual for whom any of its directors, officers or employees is a guarantor.
(2) A licensed finance company may grant to any of its officers or employees loans which are provided under its appropriate scheme of service and, where the licensed finance company is satisfied that special or compassionate circumstances exist, a loan not exceeding at any one time six months’ remuneration of that officer or employee on such terms and conditions as the licensed finance company thinks fit.
(3) The provisions of paragraph (1)(c) and of subsection
(2) shall also apply to the executive directors of licensed finance company.
(4) The provisions of paragraph (1)(d) shall not apply to the granting of advances, loans or credit facilities by a licensed finance company to—
(a) a corporation which is listed on a recognized stock exchange and in the shares of which no director of that licensed finance company has, directly or indirectly, any material interest as determined by the Central Bank; and
(b) a public company in which a director of that licensed finance company has no interest in his personal capacity, as determined by the Central Bank:
Provided that for the purposes of this subsection the director concerned is not an executive director of that licensed finance company.
(5) Any licensed finance company which has entered into any transaction prohibited under this section shall not later than 30 June 1988 or such further period as the Central Bank may specify in any particular case secure the repayment of such advance, loan or credit facility.
(6) For the purposes of this section, “director”, “officer” or “employee” includes a spouse, parent or child of a director, an officer or employee.”.
New section 21B
8. The principal Act is amended by inserting after section 21A the following new section 21B:
“Restriction on grant of loan, advance or credit facility under section 21
No licensed finance company shall grant any advance, loan or credit facility under the exemption referred to in subsection 21(4) unless the following conditions are satisfied:
(a) that the advance, loan or credit facility meets the standards of creditworthiness required of other applicant borrowers;
(b) that the terms of the advance, loan or credit facility are not less favourable to the licensed finance company than those offered to others;
(c) that the grant of the advance, loan or credit facility will serve the best interest of the licensed finance company;
(d) that the advance, loan or credit facility has been approved by the votes of not less than two-thirds of all the other directors of the licensed finance company at a duly constituted meeting of the full board of directors and the approval has been recorded in the minutes of that meeting.”.
Amendment of section 23
9. Subsection 23(1) of the principal Act is amended—
(a) by deleting paragraphs (a), (b) and (d); and
(b) by substituting for paragraph (e) the following new paragraph (e): “(e) any corporation or public company referred to in subsection 21(4);”.
Cite this legislation
- Official citation
- Act 330
- Source
- lom.agc.gov.my
- Data synced
- Licence
- Official text, free to reproduce (Copyright Act 1987 [Act 332] s 3) ↗
Finance (Banking and Financial Institutions) Act 1986 [Act 330] (Laws of Malaysia, lom.agc.gov.my). Retrieved via LawPlayer, https://lawplayer.com/my/act/act-330
This text is synced from lom.agc.gov.my. In case of any discrepancy, the authoritative text prevails.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).