Chapter 1 — Objects and operations
The Corporation established under the Malaysia Deposit Insurance Corporation Act 2005
(1) Notwithstanding the repeal of the Malaysia Deposit Insurance Corporation Act 2005 by section 210, the body corporate established under the repealed Act under the name of “Malaysia Deposit Insurance
Corporation” shall continue to be in existence under and subject to the provisions of this Act.
(2) The Corporation is the same body corporate established under the repealed Act.
(3) The Corporation shall continue to have perpetual succession and a common seal, and may sue and be sued in its corporate name.
Objects of Corporation
(1) The objects of the Corporation are to—
(a) administer a deposit insurance system and a takaful and insurance benefits protection system under this Act;
(b) provide insurance against the loss of part or all of deposits for which a deposit-taking member is liable and provide protection against the loss of part or all of takaful or insurance benefits for which an insurer member is liable;
(c) provide incentives for sound risk management in the financial system; and
(d) promote or contribute to the stability of the financial system.
(2) In achieving its objects under paragraphs (1)(b) and (d), the Corporation shall act in such manner as to minimize costs to the financial system.
Common seal and facsimile seal
(1) The common seal and facsimile seal of the Corporation may be broken, changed, altered and made anew as the Corporation thinks fit.
(2) The Board may provide for a facsimile seal and may authorize the signature of any director and secretary be produced by printing or other mechanical means.
(3) The common seal shall be used with the authority of the Board and every instrument to which the common seal is affixed shall be signed by a director and shall be countersigned by the secretary or by a second director or by some other person appointed by the Board, and all deeds, documents and other instruments purporting to be sealed with the common seal, authenticated as aforesaid, shall, until the contrary is proven, be deemed to have been validly executed.
(4) Every instrument to which the facsimile seal is affixed and signed by a director and secretary by printing or other mechanical means shall have the same force and validity as if the common seal had been affixed to such instrument and such instrument had been signed in accordance with subsection (3).
(5) All courts, judges and persons acting judicially shall take judicial notice of the common seal and facsimile seal.
(6) The common seal and the facsimile seal shall be kept in the custody of the secretary or such other person as may be authorized by the Board.
Execution of documents
Any document or instrument which, if executed by a person not being a body corporate, would not be required to be under seal may in like manner be executed by the Corporation, and any such document or instrument may be executed on behalf of the Corporation by any officer of the Corporation generally or specifically authorized by the Board in that behalf.
Establishment of committees
The Corporation may establish any committee as it considers necessary or expedient for the performance of its functions.
Office of Corporation
The Corporation may, in or outside Malaysia, establish any office as it considers necessary or expedient for the performance of its functions.
Power to appoint attorney and agent
(1) The Corporation may, by instrument under its common seal, appoint a person whether in Malaysia or in a place outside Malaysia to be its attorney, and the person so appointed may, subject to the instrument, do any act or execute any power or function which he is authorized by the instrument to do or execute.
(2) The Corporation may, in or outside Malaysia, appoint any agent as it considers necessary or expedient, to perform any act on behalf of the Corporation.
Establishment of subsidiaries
(1) For the purposes of carrying out its functions, powers and duties under this Act, the Corporation may establish such subsidiaries as it considers necessary or expedient.
(2) Without prejudice to any other provision of this Act, the Corporation may prescribe, with the approval of the Minister, for any provision of this Act to be applicable to a subsidiary of the Corporation as if the subsidiary of the Corporation is the Corporation itself.
Chapter 2 — Board of Directors
Duties and composition
(1) There shall be a board of directors which shall be responsible for the conduct of the business and affairs of the Corporation and shall
exercise all powers and do all acts which may be exercised or done by the Corporation.
(2) The Board shall consist of the following directors:
(a) a Chairman appointed by the Minister who shall have relevant private sector experience;
(b) the Governor;
(c) the Secretary General of the Treasury;
(d) two directors appointed by the Minister, one of whom shall be from the public sector and the other may be either from the public sector or one who has public sector experience; and
(e) not more than four other directors appointed by the Minister, who shall have relevant private sector experience and at least one of whom shall have relevant banking and financial sector experience.
(2A) The Minister, in appointing the directors under paragraphs 2(d) and (e), shall have regard to—
(a) diversity of the board of directors in terms of interest, knowledge, skill and experience;
(b) the person’s probity and standing; and
(c) the person’s knowledge, skill and experience in banking, insurance, economics or in any other relevant discipline, which will enable him to discharge his functions as a director.
(2B) Each director referred to in paragraph (2)(b) or (c) may assign in writing a position within his organization as the alternate director who shall attend meetings of the Board in place of the director when the director is for any reason unable to attend.
(2C) For the avoidance of doubt, for the purposes of subsection 15(9) of the Central Bank of Malaysia Act 2009 [Act 701], the position of the Deputy Governor of Bank Negara Malaysia may be assigned as the alternate director under subsection (2B).
(2D) When attending meetings of the Board in place of the directors referred to in paragraph (2)(b) or (c), the alternate directors shall for all purposes be deemed to be directors of the Board.
(3) Without prejudice to subsection 18(2), none of the directors referred to in paragraph (2)(b), (c) or (d) shall be eligible to be appointed Chairman by the Minister.
Board may make by-laws
(1) The Board may make such by-laws as are necessary or expedient in relation to the administration, management, control, business, assets and affairs of the Corporation including—
(a) the functions, powers, duties, remuneration, benefits and terms and conditions of service, code of conduct or surcharge on officers, employees and agents of the Corporation;
(b) the conflicts of interest in respect of serving directors, officers and employees of the Corporation and those directors, officers and employees who have left the service of the Corporation;
(c) the appointment, terms of reference and activities of committees established by the Corporation;
(ca) the quorum of a meeting of the Board;
(d) the rules and procedures to be observed by the directors at Board meetings; and
(e) such other matters as may be required to be provided for under by-laws in this Act.
(2) By-laws made under this section shall be binding on all persons to whom the by-laws apply.
(3) Any person who does not comply with the by-laws made under paragraph (1)(b) commits an offence.
Term of office of directors
(1) The directors appointed by the Minister under subsection 11(2) shall hold office for terms not exceeding three years and shall be eligible for reappointment.
(2) The Governor and the Secretary General of the Treasury shall be directors for the duration of their tenures as the Governor and the Secretary General of the Treasury, respectively.
(3) An alternate director assigned in subsection 11(2B) by a director referred to in paragraph 11(2)(b) or (c) (referred to in this subsection as “principal director”) shall, unless the assignment is sooner revoked in writing or the position is no longer in existence, cease to be an alternate director when the principal director ceases to be a member of the Board.
Disqualifications and termination of directors of Board
(1) No person shall be appointed or shall remain as a director of the Board who is—
(a) a member of the Dewan Negara or Dewan Rakyat or any Legislative Assembly;
(b) an officer of a member institution; or
(c) an office bearer of, or any person who holds any similar office or position in a political party.
(1A) For the purposes of paragraph (1)(c), “office bearer” means any person who is the president or vice-president, or secretary or treasurer
of a political party or any branch of such political party, or who is a member of the committee or a member of the governing body of a political party or any branch of such political party or who holds in a political party or any branch of such political party any office or position, by whatever name called, which is analogous to any of those mentioned above or in respect of which the person exercises management or control of the affairs of the political party or any branch of such political party.
(2) The Minister may terminate or suspend the appointment of any director if—
(a) he becomes of unsound mind or otherwise becomes incapable of carrying out his duties;
(b) there has been imposed on the director any form of restriction or supervision by bond or otherwise, under any law relating to prevention of crime, or to preventive detention for prevention of crime or drug trafficking, or to restricted residence, or to banishment or immigration;
(c) he becomes a bankrupt, suspends payment or compounds with his creditors;
(d) he has been charged for a criminal offence under any law punishable with imprisonment, whether by itself, or in lieu of, or in addition to, a fine, in any court in or outside Malaysia;
(e) he is guilty of serious misconduct in relation to his duties under this Act; or
(f) he is absent, except on leave granted by the Minister in the case of the Chairman or by the Chairman in the case of any other director, from two of the meetings of the Board in any period of twelve months.
(3) Notwithstanding subsection (2), any director appointed by the Minister under subsection 11(2) may at any time resign his office by giving a written notice of not less than thirty days to the Minister.
Actions and proceedings of Board not affected by vacancy, etc.
The Board may act notwithstanding any vacancy and its proceedings shall not be invalidated by—
(a) the absence of any director;
(b) any defect afterwards discovered in the appointment or qualification of any director or the constitution of the Board;
(c) any omission, defect or irregularity in the convening or conduct of a meeting; or
(d) the presence or participation of a person who is not a director of the Board.
Remuneration and allowances for directors
Every director including alternate director shall be paid by the Corporation such fees, allowances and any other remuneration as may be determined by the Minister, on the recommendation of the Board.
Duties of directors
(1) A director of the Board shall, at all times, act honestly and in the best interest of the Corporation and use reasonable diligence in the discharge of the duties of his office.
(2) A director or any person who has been a director shall not—
(a) make improper use of any information acquired by virtue of his position as a director to gain, directly or indirectly, an advantage for himself or for any other person; or
(b) do, say or publish anything which may be detrimental to the interests of the Corporation.
Meetings
(1) The Board shall meet as often as may be required but not less than four times a year.
(2) The Chairman shall preside at all meetings of the Board and in his absence, the directors present shall elect a chairman from among the directors referred to in paragraph 11(2)(e) and the person so elected shall preside and have all the powers of the Chairman.
(3) (Deleted by Act A1647).
(4) The decisions of the Board shall be adopted by a simple majority of the votes of the directors present and voting.
(5) In the case of an equality of votes, the Chairman shall have a casting vote.
(6) A resolution in writing, signed by all the directors for the time being entitled to receive notice of a meeting of the directors, shall be as valid and effective as if it had been passed at a meeting of the directors duly convened and held and any such resolution may consist of several documents in like form, each signed by one or more directors.
(7) Nothing in this section shall prevent the Chairman from authorizing a director to use live video, television links or other appropriate communication or multimedia facilities to participate in any meeting of the Board where, prior to the meeting, the director, by notification to the Chairman, has requested for such authorization.
Chapter 3 — Chief Executive Officer
Appointment, functions and accountability
(1) The Chief Executive Officer shall be appointed by the Minister, on the recommendation of the Board.
(2) The Chief Executive Officer shall be responsible for the day-to-day administration of the business and affairs of the Corporation.
(3) The Chief Executive Officer shall be answerable and accountable to the Board for the exercise of his powers and the performance of his duties.
(4) In the absence or incapacity of the Chief Executive Officer, the Board may authorize an officer of the Corporation to perform the duties, functions and responsibilities of the Chief Executive Officer.
Terms and conditions of service
The Chief Executive Officer shall—
(a) for the purposes of Chapter 4, be deemed to be an officer or employee of the Corporation and be subject to terms and conditions of service; and
(b) enjoy such compensation, benefits and any other remuneration as approved by the Minister, upon the recommendation of the Board.
Chapter 4 — Officers and employees, etc
Appointments, terms and conditions of service
(1) The Corporation may appoint such officers and employees as are necessary to carry on the business and affairs of the Corporation and such officers and employees shall hold office for such periods, receive such compensation and any other remuneration, and shall be subject to such terms and conditions of service as may be determined by the Board.
(2) An officer or employee of the Corporation shall, at all times, act in good faith and comply with such requirements, standards, duties and code of conduct including surcharge as may be provided in the by-laws made by the Board under paragraph 12(1)(a).
(3) The Corporation may, with the approval of the Board, establish and maintain a pension or provident fund for its officers and employees out of the monies of the Corporation.
Financial assistance to officers, employees and other persons
The Corporation may provide—
(a) subsidies, grants, Islamic financing facilities or conventional credit facilities, with or without return or interest, for the acquisition of housing or vehicle or for medical purposes or for compassionate financing or loans, to its officers and employees;
(b) Islamic financing facility or conventional credit facility, with or without return or interest, for educational purposes or scholarships to its officers and employees or any other person; and
(c) donations to any person,
on such terms and conditions as the Board may determine.
Chapter 5 — Duties and powers
Restriction on enquiring specifically into affairs of particular customer
Without prejudice to the powers of inspection, examination, investigation, inquiry or resolution conferred on the Corporation, nothing in this Act shall—
(a) authorize the Minister to direct the Corporation; or
(b) authorize the Corporation,
to inquire specifically into the affairs of any customer of a member institution.
Secrecy
(1) A director, officer, employee or agent of the Corporation, including a person appointed under subsection 25(3) or any person who for any reason has by any means access to any record, book, register, correspondence or other document whatsoever, material or information relating to the business and affairs of—
(a) the Corporation;
(b) Bank Negara Malaysia;
(c) a member institution;
(d) a customer of Bank Negara Malaysia; or
(e) a customer of a member institution,
which he has acquired in the performance of his duties or the exercise of his functions, shall not—
(A) give, divulge, reveal, publish, or otherwise disclose, to any person, such record, book, register, correspondence or other document whatsoever, material or information; or
(B) make any use of such record, book, register, correspondence or other document whatsoever, material or information,
unless the disclosure or use, as the case may be, is required—
(C) under any law;
(D) for the performance of his duties or the exercise of his functions under this Act; or
(E) lawfully by any court.
(2) No person who has received or obtained any record, book, register, correspondence or other document whatsoever, material or information disclosed in accordance with subsection (1) shall disclose or make use of the same except for the specific purpose for which the record, book, register, correspondence or other document whatsoever, material or information was so disclosed to such person.
(3) This section shall not apply to any record, book, register, correspondence or other document whatsoever, material or information which at the time of the disclosure is, or has already been made, lawfully available to the public from any source.
(4) No person who has any record, book, register, correspondence or other document whatsoever, material or information which to his knowledge has been disclosed in contravention of subsection (1) shall in any manner howsoever disclose the same to any other person.
(5) Where the Corporation in the course of the exercise of any of its powers, or the discharge of any of its duties or functions, under this Act or under any law whatsoever, suspects any person to have committed any offence under this Act, or any other law whatsoever, it shall be lawful for the Corporation to give information of such commission to a police officer, or to convey any information in relation to such offence to any member institution or other person affected by such offence or to any other authority or person having power to investigate under or enforce the provision of the law under which the offence is suspected by the Corporation to have been committed.
(6) Subsection (5) shall have full force and effect notwithstanding any inconsistency therewith or contrary thereto, in this Act or any other law.
(7) Any person who contravenes subsection (1), (2) or (4) commits an offence and shall, on conviction, be liable to a fine not exceeding
three million ringgit or to imprisonment for a term not exceeding three years or to both.
Powers of Corporation
(1) The Corporation shall have all such powers as may be necessary for or in connection with, or reasonably incidental to, the furtherance of its objects, the performance of its functions or the discharge of its duties.
(2) Without prejudice to the generality of subsection (1), for the purposes of this Act, the Corporation may do all such things necessary for or incidental to the objects of the Corporation and, in particular, the Corporation may—
(a) for the purpose of reducing or averting a risk to the financial system or a threatened loss to the Corporation—
(i) acquire assets from a member institution;
(ii) except for purposes of the provision of liquidity assistance, make loans or advances or provide financing with or without security, or guarantee with or without security any loan, advance or financing provided, to a member institution;
(iii) acquire, by way of security or otherwise, or subscribe to shares or capital instruments of a member institution and hold, dispose of or otherwise deal with such shares or capital instruments;
(iv) make a deposit with a deposit-taking member;
(v) guarantee all or part of the liability of a deposit-taking member in respect of a deposit; or
(vi) guarantee or assume all or part of the liability of an insurer member in respect of a takaful or insurance benefit;
(b) hold, dispose of or otherwise deal with assets acquired from a member institution;
(c) borrow or otherwise raise funds in such manner as the Corporation thinks fit;
(d) acquire and hold any movable or immovable property for its own use and dispose of or otherwise deal with such property;
(e) guarantee, indemnify, or become liable for the payment of monies or the performance of any obligations;
(f) mortgage, charge or create a lien on or transfer or otherwise deal with any of its assets to secure the performance of any of its obligations or any of the obligations of any other person;
(g) enter into any agreement with any person in furtherance of its objects or in relation to the performance of its functions, including a strategic alliance agreement with Bank Negara Malaysia;
(h) settle or compromise any claim by or against the Corporation;
(ha) provide such subsidies, grants, Islamic financing facility or conventional credit facility, with or without return or interest, to any person for the purpose of training, research, education or development of human resource in relation to banking and financial services; and
(i) do all such other things as may be necessary for or incidental to the exercise of any power or the performance of any obligation of the Corporation.
(3) The Corporation may, either generally or in any particular case, appoint any person who is not a director, officer or employee of the Corporation, to render such assistance as it may specify in the exercise of its powers, the performance of its functions, or the discharge of its
duties, under this Act, or to exercise, perform or discharge such powers, functions or duties on behalf of and in the name of the Corporation as may be specified by the Corporation.
Lending of money or provision of financing for specified purposes
The Corporation may make a loan or provide financing, whether with or without security, to a corporation other than a member institution—
(a) for the purpose of, or in connection with, the implementation of one or more resolution actions under this Act; and
(b) for the purpose of reducing or averting a risk to the financial system or a threatened loss to the Corporation.
Prescription of additional member institutions
(1) For the purpose of promoting or maintaining the stability of the financial system or public confidence in that stability and on the recommendation of the Corporation and Bank Negara Malaysia, the Minister may by order published in the Gazette, prescribe any development financial institution or any other person regulated and supervised by Bank Negara Malaysia, other than a financial institution defined in section 2, to be a member institution for the purposes of this Act.
(2) The order referred to in subsection (1) may provide that any provision of this Act shall not apply in respect of such person, or shall apply in respect of such person with modifications.
Funds and sources of funds
(1) For the purposes of this Act, the Corporation shall maintain and administer the following six separate funds:
(a) an Islamic deposit insurance fund which shall comprise—
(i) all premiums received by the Corporation under this Act; and
(ii) all other monies or assets which may in any manner become lawfully payable to, received by or vested in the Corporation relating to any matter incidental to its powers, duties and functions,
in respect of Islamic deposits;
(b) a conventional deposit insurance fund which shall comprise—
(i) all premiums received by the Corporation under this Act; and
(ii) all other monies or assets which may in any manner become lawfully payable to, received by or vested in the Corporation relating to any matter incidental to its powers, duties and functions,
in respect of conventional deposits;
(c) a family takaful protection fund which shall comprise—
(i) all levies received by the Corporation under this Act; and
(ii) all other monies or assets which may in any manner become lawfully payable to, received by or vested in the Corporation relating to any matter incidental to its powers, duties and functions,
in respect of family takaful certificates;
(d) a general takaful protection fund which shall comprise—
(i) all levies received by the Corporation under this Act; and
(ii) all other monies or assets which may in any manner become lawfully payable to, received by or vested in the Corporation relating to any matter incidental to its powers, duties and functions,
in respect of general takaful certificates;
(e) a life insurance protection fund which shall comprise—
(i) all levies received by the Corporation under this Act; and
(ii) all other monies or assets which may in any manner become lawfully payable to, received by or vested in the Corporation relating to any matter incidental to its powers, duties and functions,
in respect of life policies; and
(f) a general insurance protection fund which shall comprise—
(i) all levies received by the Corporation under this Act; and
(ii) all other monies or assets which may in any manner become lawfully payable to, received by or vested in the Corporation relating to any matter incidental to its powers, duties and functions,
in respect of general policies.
(2) The Corporation is empowered to credit all direct operating income to, and charge all expenses, costs and losses against the relevant particular fund or funds, and where such expenses, costs or losses cannot be specifically attributed to a particular fund or funds, such charge—
(a) shall be allocated among the funds in accordance with a formula prescribed by the Corporation; or
(b) if the Corporation has not prescribed a formula, shall be allocated among the funds in proportion to the amount of Islamic and conventional premiums and levies collected in the assessment year prior to the year in which such credit or charge is made.
(3) The Corporation is empowered to transfer monies or assets from any of the funds to another fund, as may be necessary for or in connection with, or reasonably incidental to, the furtherance of its objects, the performance of its functions or the discharge of its duties, and subject to such conditions as the Corporation may specify.
Lending of money or provision of financing to Corporation
(1) Without prejudice to section 156, the Minister may, upon request of the Corporation, lend money or provide financing to the Corporation on such terms and conditions as the Minister may determine.
(2) Any lending of money or provision of financing pursuant to subsection (1) shall be made out of the Consolidated Fund and where such lending or provision of financing is made, the Minister shall cause a statement on such lending or provision of financing to be laid before the Dewan Rakyat at the earliest possible opportunity.
Permitted investments
(1) The Corporation may invest in the following:
(a) ringgit denominated securities issued or guaranteed by the Government or Bank Negara Malaysia or of high investment grade as rated by a reputable rating agency;
(b) deposits with Bank Negara Malaysia or any financial institution; or
(c) any other investment as approved by the Minister, upon the recommendation of the Board.
(2) The Corporation may, solely for the purpose of hedging any exposure arising from paragraph (1)(a), (b) or (c), enter into financial transactions, whether exchange traded or over the counter including swaps, futures, options and forward contracts.
(3) Any investment made by the Corporation under subsection (1) from the Islamic deposit insurance fund, the family takaful protection fund or the general takaful protection fund shall be in accordance with Shariah.
Financial year
Unless otherwise directed by the Minister, the financial year of the Corporation shall begin on the first day of January and end on the thirty-first day of December of each year.
Requirement to keep books, records, accounts or other documents
The Corporation shall cause proper books, records, accounts or other documents to be kept and shall, as soon as practicable after the end of each financial year, cause to be prepared for that financial year appropriate financial statements in accordance with the Statutory Bodies (Accounts and Annual Reports) Act 1980 [Act 240].
Auditor
The accounts of the Corporation shall be audited by the Auditor General.
Financial statements and annual report
(1) The Corporation shall, within three months from the close of its financial year, transmit a copy of the annual accounts audited by the Auditor General and an annual report on the working of the Corporation throughout the year to the Minister, who shall, as soon as possible, cause them to be laid before the Dewan Negara and the Dewan Rakyat.
(2) The Corporation may publish the annual accounts and annual report referred to in subsection (1) in the event that the annual accounts and annual report are not able to be laid before the Dewan Negara and the Dewan Rakyat within six months from 31 December of the preceding assesment year.
Non-consolidation of financial statements
Notwithstanding section 32 and any other law, the Corporation shall not be required to prepare, present or publish consolidated financial statements and the Corporation, a bridge institution and any other subsidiary of the Corporation as it specifies may prepare, present and publish separate financial statements.
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).
