Section 16 — BANKING ACT 1973

(2)

The minimum amount or amounts of the assets so prescribed to be held shall be expressed in the form of a percentage or percentages which such assets shall bear to the sight, savings account, time and other deposit liabilities of each licensed bank, either jointly or separately, and such percentage or percentages may be varied by the Central Bank from time to time by notice in writing to the bank.

(3)

Whenever the Central Bank issues a notice under subsection (1) each licensed bank shall be allowed such uniform period of grace, being not less than one week, as may be specified in that notice in which to comply with the provisions thereof.

(4)

A licensed bank shall not, during any period in which it has failed to comply with any notice under subsection (1), without the approval of the Central Bank, advance any money to any person.

(5)

For the purpose of computing the minimum amount or amounts of liquid assets under this section and assets specified under section 17 and the sight, savings account, time and other deposit liabilities of a bank carrying on business in the Federation and elsewhere, the offices and branches of such bank in the Federation shall be deemed to constitute a separate bank carrying on business in the Federation.

(6)

For the purposes of this section liquid assets shall be—

(a)

notes and coin which are legal tender in the Federation;

(b)

balances at the Central Bank, not including the reserve specified in paragraph (c) of subsection (1) of section 37 of the Central Bank of Malaysia Ordinance, 1958;

(c)

net balances with banks in the Federation;

(d)

net money at call in the Federation;

(e)

Treasury bills issued by the Government or by the Government of any State authorized to issue Treasury bills; and

(f)

inland bills of exchange and promissory notes rediscountable at the Central Bank; and

(g)

such other assets as may be approved by the Minister on the recommendation of the Central Bank.

(7)

The Central Bank may by notice in writing require each licensed bank to render such return or returns as the Central Bank deems necessary for the implementation of this section and of section 17.

(8)

Any bank which fails to comply with any of the provisions of this section shall be liable to pay, on being called upon to do so by the Central Bank, a penalty interest charge of not more than one-tenth of one per centum of the amount of the deficiency for every day during which the deficiency continues.

(9)

Any licensed bank which fails or refuses to pay a penalty interest charge under subsection (8) shall be guilty of an offence under this Act.