Act 125

the acceptance of any money on deposit or loan by a person (in this definition referred to as “the borrower”) from more than ten persons wherein the borrower is under a liability (whether or not such liability is present or future) to repay the money to these persons; and

of the Federation; or

which by reason of any agreement or arrangement entered into between the Central Bank and any other monetary authority of anothér country; is deemed to be interchangeable with the curtency of the Federation;

“licence” means a licence granted under this Act enabling a public company to carry on borrowing business;

“Minister” means the Minister chatged with the résponsi-bility for finance;

“public company” means a public company as defined in thé Companies Act, 1965.

a public company; and

a licensed borrowing company.

Any person who contravenes the provisions of sub-section (1) is guilty of an offencé and shall on conviction be liable to a fine not exceeding ivethousand—dollars or to bot for a term not exceeding three years or to bot

Exclusion of non-borrowing business.

accept any money on deposit or loan which is [icensed, |

repayable on demand by cheque, draft, order or company.

any other instrument drawn by the depositor on the licensed borrowing company; or

deal in—

gold; or

a certified true copy of its memorandum and articles;

a certified true copy of its certificate of incorpora-tion;

a certified true copy of its latest and duly audited balance sheet; and

such other written information as may be required by the Central Bank, certified by a director or the secretary of the company.

Upon receiving an application under sub-section (1)

the Central Bank shall consider the application and make a recommendation to the Minister stating whether or not a licence should be granted to the company and the condi-tions (if any) to be attached to the licence.

Upon receiving the application and recommendation the Minister may grant a licence to the public company with or without conditions if the paid-up capital in cash of the public company (unimpaired by losses or otherwise) is not less than one million Malaysian dollars.

[S. 7-8]

Minister may suspend or revoke licence.

8 Act 6

Notwithstanding anything to the contrary in this section, a public company may carry on borrowing business without a licence if—

it performs the functions of a discount house; or

carries on its business in a manner which in the opinion of the Central Bank is detrimental to the interests of its depositors;

has insufficient assets to cover its liabilities to its depositors;

carries on business while its paid-up capital

(unimpaired by losses or otherwise) is less than one million Malaysian dollars; or

contravenes any provision of this Act or of any regulations madé thereunder, the Minister may on the recommendation of the Central

Bank revoke or suspend the licence of the licensed borrowing company subject to such conditions and restrictions as the

Minister may think fit to impose but before the Minister suspends or revokes the licence he shall inform the borrowing company in writing—

() of his intention to do so; and

The decision of the Minister shall be final and shall not be subject to appeal or to review in any court.

When the licence of a borrowing company has been revoked or suspended pursuant to sub-section (1) the borrowing company shall forthwith cease to use or display in any manner the words, “licensed borrowing company”.

[S. 8-12]

Fn asced

BORROWING COMPANIES 9

Any borrowing company which fails to comply with the provisions of sub-section (3) is guilty of an offence and shall on conviction be liable to a fine not exceeding/fve Khoo ly thoutrd theusanddollars and to a fine not exceeding five hundred sa ve -

dollars for every day the offence continues. Abb 34

a licence fee on its being granted a licence and in addition a fee for each office or place of business

(other than its principal place of business) when the office or place of business is established;

an annual licence fee for the licensed borrowing company in addition to the fee described in paragraph (a) not later than the 31st day of

January; and

an annual fee for each office or place of business

(other than its principal place of business) not later than the 31st day of January, according to the rates prescribed in the First Schedule.

The Minister may by notification in the Gazette amend the First Schedule.

it is its wholly-owned subsidiary; owned

it is incorporated in the Federation; and anne

the prior written consent of the Central Bank has been obtained.

outside the Federation; or

in the Federation without the prior written consent of the Central Bank.

12, The Central Bank shall publish in the Gazette— Cael

every year not later than the 31st day of March the publish list names of licensed borrowing companies; oe

the names of licensed borrowing companies to companies.

which licences are granted after the publication of the names pursuant to paragraph (a); and

the names of licensed borrowing companies whose licences are suspended or revoked.

[S. 13:16]

10 Act 6

Name tobe 13, (1) Every licensed borrowing company shall paint or onal affix and keep painted or affixed on the outside of every offices. office or place of business in a prominent position and easily legible in the National Language its name and the words, “licensed borrowing company”.

Any licensed borrowing company which fails to comply with the provisions of sub-section (1) is guilty of an offence and shall on conviction be liable to a fine not ie exceeding /fve—hundred—dollars for every day the offence continues.

ATemion 14. When a licensed borrowing company alters its memo-randumor Tandum or articles pursuant to the relevant provisions of the aes. Companies Act, 1965 (as the case requires) it shall within one month of the alteration inform the Central Bank of the alteration and supply the Central Bank with a certified true copy of its memorandum or articles as altered and certified by a director or the secretary of the company.

The minimum amount of liquid assets shall be expressed as a percentage of the deposit liabilities of every licensed borrowing company/and such percentage may be varied by the Central Bank from time to time by notice in writing to every licensed borrowing company.

When the Central Bank issues a notice under sub-séctiori (1) 6ach licénséd borrowing company shall be allowed a period of not less than oné weék (as may be specified in such notice) within which to comply with the requirements of the notice.

Where a licensed borrowing company fails to comply with the requirements of the notice it shall not lend any money to any person unless it obtains the written approval fa ei entral Bank.

Por the purposes of this section liquid assets shall be—

In sub-section (1), the expression “unsecured advance, loan or credit facility” means—

All the directors of a licensed borrowing company shall be liable jointly and severally to indemnify the licensed borrowing company against any loss arising from the making of an unsecured advance, loan or credit facility in contra-vention of sub-section (1).

Subs. Act 230

For the purposes of this $ection and section 23 a

“director” shall be deemed to include the wife, husband, father, mother, son or daughter of a director.

i (i) Except with the consent in writing of the Central

Bank no licensed borrowing company may acquire—

Sub-section (1) shall not apply in respect of any share, immovable property or beneficial interest acquired by the licensed borrowing company in the course of satisfaction of debts due to it.

Any shares, immovable property or beneficial interest acquired pursuant to sub-section (2) shall be disposed of as soon as practicable but not later than one year or such longer period as the Central Bank may allow in any parti-cular case, commencing on the date the shares, immovable property or beneficial interest were acquired.

any of its directors as dbfined in section 21 and subject to that section;

any firm in which it or/any of its directors (as defined in section 21), is interested as partner, manager or agent or any individual or firm of whom or of which any of its directors is a guarantor;

Sf

any of its subsidiaries or related companies;

any-ofits-efficers-or employees;

Loans to directors prohibited.

<— AAO3L

— . Act 330

Restrictions on invest-ments.

Central

Bank may take action if advances are against interests of depositors.

D/Act 330

D/A<} 320

[S. 23-25]

14 Act 6

—-

Sides. Hef 220 (e) any private or public dorporation in which it or

Statement of liabilities and assets of offices to be furnished.

Ad of

Information and data to be supplied.

A634 —>

PACH any of its directors (as defined in section 21), officers or employees [is interested as a director, manager, agent or guar. antor;

any individual in whom or any firm or corporation in which any of its directors is interested directly or indirectly other than such advances, loans and credit facilities, particulars of which have already been supplied pursuant to paragraphs (a) to (e).

If on examination of the particulars supplied by a licensed borrowing company under sub-section (1) it appears to the Central Bank that any advances, loans or credit facilities are being granted to the detriment of the interests of the depositors of the licensed borrowing company the

Central Bank may by order in writing to the licensed borrowing company prohibit the licensed borrowing com-pany from granting any further advances, loans or credit facilities or impose such restrictions on the grant thereof as the Central Bank thinks fit and may further ordér the licensed borrowing company to secure repayment of any loans within such time and to such extent as may be specified in the order.

Any licensed borrowing company which fails to comply with any of the provisions of this section is guilty of an offence and shall te conviction be aahe vfs not exceeding thousan deters ars for every day the offence continues. fer bef

who is an approved company auditor pursuant to section 8 of the Companies Act, 1965; and

who in addition to being an approved company auditor pursuant to paragraph (a) is again approved by the Minister for the purposes of this

Act.

Sections 30, 31 and 32 shall apply to an auditor appointed under this section as if for references to the

Central Bank there were substituted references to the auditor.

arrangement for the sal¢ of its shares or its business;

or

If any book, account or document or information is not supplied in accordance with sub-section (1), the person is guilty of an offence and shall on ¢ eonviction be liable to a fine not exceeding SSS thousand in respect of every day the offence continues.

For the purposes of an investigation under this Part, all officers and employees of the Central Bank shall be deemed to be public servants within the meaning of the

Penal Code.

a licensed borrowing company informs the Central

Bank—

that it considers that it is likely to become unable to meet its obligations; or

a licensed borrowing company becomes unable to meet its obligations or suspends payment; or

after an investigation is made under this Part the

Central Bank is of the opinion that a licensed borrowing company—

is likely to become unable to meet its obliga-tions or is about to suspend payment; or

[S. 33-35]

BAnénmesd

BORROWING COMPANIES 17

Gi) is carrying on its business in a manner detrimental to the interests of its depo-sitors, the Central Bank may—

require the licensed borrowing company forthwith to take such steps as the Central Bank may consider necessary or expedient;

the deposit liabilities of the licensed borrowing company have been repaid or the Central Bank is satisfied that suitable provision has been made for their repayment; or

in the opinion of the Central Bank it is no longer necessary or expedient for the Central Bank to remain in control of the business of the licensed borrowing company.

Any licensed borrowing company which fails to comply with sub-section (1) or with any requirement of the Central Bank pursuant to that sub-section is guilty of an offence and shall on conviction, be liable to a fine not exceeding thousand Pouers for every day the offence continues. Ser rule

=—— MBS

Control of licensed borrowing company by

Central

Bank.

Licensed borrowing company under control of

Central

Bank to co-operate with Central

Bank.

AAGRT

[S. 36-38]

Extension of jurisdiction to subsidia-ries of licensed borrowing company.

Directions by Central

Bank.

Indemnity.

18 Act 6

the policy to be followed by licensed borrowing companies in relation to the granting of advances and the extension of credit facilities including the purposes for which advances may be made or credit facilities extended;

the rates of interest payable to or by licensed borrowing companies, the rates of discount chargeable by licensed borrowing companies or the rates of commission and other charges payable to licensed borrowing companies;

a reserve to be held by each licensed borrowing company at the Central Bank against its deposit liabilitiesfin the Federation.