*GOVERNMENT FUNDING ACT 1983

any licensed bank, licensed merchant bank, licensed finance company, or licensed discount house, as those terms are defined in the Banking and Financial

Institutions Act 1989 [Act 372];

(aa) any institution which is licensed to carry on Islamic banking business under the Islamic Banking Act 1983

[Act 276];

any State Government;

any statutory body; or

any fund, scheme, organization, body corporate or unincorporate, or any other person, as may be specified in writing by the Minister;

“instrument” means any instrument created and issued under this

Act in accordance with Syariah priciples;

“investment” means moneys paid by any person under sections 3

and 5;

“investment customer” means a person who makes a transfer or takes a transfer of an investment under subsection 9B(2);

“Minister” means the Minister charged with the responsibility for finance;

“notification” means a notice inviting applications or offers to subscribe for or purchase an instrument;

“participating investing institution” means a financial institution authorized by the Bank under subsection 9A(1);

“primary investing institution” means a participating investing institution appointed by the Bank under subsection 9A(2);

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“return” includes any form of rental, profit, dividend or benefit, including any fee or gift, payable or to be given in relation to the instrument;

“statutory body” means any body or authority established, appointed or constituted by any written law, and includes any local authority;

“Syariah Advisory Council” means the Syariah Advisory Council established under subsection 16B(1) of the Central Bank of Malaysia

Act 1958.

Where any record or account is required to be maintained under this Act by the Bank or by any participating investing institution, whether acting in its capacity as a primary investing institution or a depository institution or otherwise, the same shall be maintained in such manner or such means as the Bank may determine or specify, including its maintenance in writing or by means of any visual recording (of still or moving images), or any sound recording or any electronic, magnetic, mechanical, or other recording whatsoever, on any substance, material, thing or article.

Instrument issued to be in accordance with Syariah principles

Subject to section 2A, an instrument may be created and issued by such method or by such arrangement or by entering into any transaction with any other person in any manner or form as the

Minister deems fit.

The total amount of moneys received under subsection (1) not repaid at any one time shall not exceed an amount to be specified from time to time by the Yang di-Pertuan Agong by order published in the Gazette.

An order under subsection (2) shall, as soon as possible after its publication, be laid before the Dewan Rakyat.

Application of moneys

repayment of the moneys so received, to such extent as the Minister may determine;

payment, with the prior approval of the Dewan Rakyat signified by resolution, into the Development Fund specified in the Second Schedule to the Financial Procedure

Act 1957 [Act 61], for the purposes of that Fund.

Period of investments

The terms and conditions of an instruments shall include the following:

The Bank may appoint in writing any participating investing institution to be a primary investing institution.

Only a primary investing institution may make an investment with the Bank, and the Bank shall maintain an entry in its records of every such investment.

A participating investing institution shall maintain a single account with the Bank—

The Bank shall pay to the participating investing institution return on each of its investments standing in its account under subsection (4) on the date the return becomes payable under section 8, and shall pay to such institution each of the investments standing in its account under subsection (4) as provided under section 9.

The Bank shall maintain records of the account of a participating investing institution, and such records shall be the sole and conclusive evidence of the state of such account, and of all the particulars and details thereof, and the same shall be binding on the

Bank, the participating investing institution and on any other person having any interest therein.

Depository institutions

Any person, other than a participating investing institution, desiring either to make a transfer or take a transfer of an investment shall do so only through a depository institution.

A depository institution shall maintain with the Bank, in addition to the account maintained by it under subsection 9A(4), a separate single account in respect of all transfers effected through it under subsection (2).

The Bank shall pay to a depository institution return on each of the investments standing in the depository institution’s account under subsection (3) on the date the return becomes payable under section 8, and shall pay to such institution the investments standing in its account under subsection (3) on the date of maturity of the respective investments under section 9, by such means and in such manner as may be determined by the Bank.

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A depository institution shall maintain a customer’s account in respect of every transferor and transferee who is a party to any transfer effected through the depository institution under subsection

, except where a customer’s account in respect of a transferee is maintained by another depository institution, in which case the first mentioned depository institution shall have the investment transferred into the transferee’s account with the second mentioned depository institution.

Where a transfer of an investment is made by any person under subsection (2), the Bank may require any depository institution to issue an acknowledgement receipt in such form and manner as may be determined by the Bank.

An acknowledgement receipt issued under subsection (6) shall not be capable of being negotiated or dealt with in any manner whatsoever, and shall be used solely between the depository institution which issued it and the investment customer to whom it was issued as evidence of the transfer of an investment under subsection (2) to which it relates.

Where the amount in the account maintained by a depository institution with the Bank under subsection (3) is affected by a transfer effected through it under subsection (2), the depository institution shall communicate forthwith to the Bank information of any change in such amount caused by the transfer.

Duties and obligations of depository institutions in relation to transfers effected under subsection 9B(2)

A depository institution shall issue to each of its investment customers a monthly statement in such form and within such period as may be determined by the Bank.

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A monthly statement shall be the sole evidence of the investments held by an investment customer at the close of the month in respect of which it is issued.

A depository institution shall pay to the investment customer—

The investments dealt with by a depository institution in respect of any transfer effected through it under subsection 9B(2)

shall be dealt with solely and exclusively in the manner, and for the purpose, provided under section 9B, and shall not be dealt with or utilized by the depository institution in any other manner whatsoever, or for any other purpose whatsoever.

A depository institution shall furnish to the Bank such returns, details, particulars or information in relation to the account maintained by it under subsection (1) in respect of each investment customer, or its investment customers generally, as may be specified by the Bank, or as the Bank may from time to time require in writing.

The Bank may, through any of its officers authorized in writing by the Governor or the Deputy Governor of the Bank, inspect and take copies of accounts maintained by a depository institution under this section, including the accounts in respect of any particular investment customer or any other record or account relating to or affecting any investments under this Act, and the depository institution, and every director, officer, employee, servant or agent of the depository institution shall furnish to such officer of the Bank all such books, records, correspondence, or any other document as may

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be required by the officer, and shall provide him all such assistance as he may require.

The account of an investment customer maintained by a depository institution under subsection (1) shall be secret as between the institution and the investment customer and shall not be disclosed to any person by the depository institution except to the Bank, including the officers of the Bank referred to in subsection (7), unless such disclosure is authorized in writing by the investment customer.

A depository institution shall be absolutely and wholly responsible and liable to its investment customer in respect of all transfers taken or made by the investment customer through it under subsection 9B(2).

A depository institution shall not require an investment customer to pay any charge, fee, or any other payment in respect of any matter dealt with by it in relation to an investment customer under this Act, except as may be provided by rules made under section 16.

Bank’s power to require information, inspect and take copies

The Bank may, through any of its officers authorized in writing by the Governor or Deputy Governor of the Bank, inspect or take copies of any account, record, book, or any other document maintained by a participating investing institution under this Act.

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Maintenance of secrecy by the Bank

make or cause to be made a false entry;

omit to make, or cause to be omitted, an entry; or

alter, abstract, conceal or destroy, or cause to be altered, abstracted, concealed or destroyed, any entry, in any book or record, or in any report, slip, statement or other document whatsoever, relating to the business, affairs, transactions, conditions, property, assets, liabilities, or accounts of any participating investing institution, or any primary investing institution, or any depository institution, or of the Bank.

Contravention of Act, penalty therefore and criminal liability of institutions, directors, etc.

ten million ringgit; or

where an amount of money is the subject matter of the offence, ten times such amount, whichever is the greater, or to imprisonment for a term not exceeding fifteen years, or to both such fine and imprisonment:

Provided that where the person found guilty of such offence is a body corporate, the above-mentioned punishment of imprisonment shall not apply to it.

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Where any offence against any provision of this Act has been committed by any institution mentioned in subsection (1), any person who at the time of the commission of the offence was a director, officer, or controller of the institution or was purporting to act in any such capacity, or was in any manner or to any extent responsible for the management of any of the affairs of such institution, or was assisting in such management, shall be guilty of that offence unless he proves that the offence was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances.

Where any person (hereinafter in this subsection referred to as the “principal”) would be liable under this Act to any punishment or penalty for any act, omission, neglect or default, he shall be liable to the same punishment or penalty for every such act, omission, neglect or default of any clerk, servant or agent of his, or of the clerk or servant of such agent:

Provided that such act, omission, neglect or default was committed by the principal’s clerk or servant in the course of his employment, or by the agent when acting on behalf of the principal, or by the clerk or servant of such agent in the course of his employment by such agent or otherwise on behalf of the agent.

Without prejudice to subsection (2), where an institution referred to in subsection (1) is a financial institution under paragraph

Nothing in this Act contained shall be deemed to prevent the prosecution, conviction and punishment of any person according to the provisions of any other written law; but so that no person shall be punished more than once for the same offence.

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For the purposes of this section, “director”, “officer” and

“controller” shall have the meaning respectively assigned thereto under subsection 2(1) of the Banking and Financial Institutions

Act 1989.

Civil liability not affected by prosecution or non-prosecution, etc.

Without prejudice to the generality of subsection (1), rules may be made to provide for—

For the purposes of subsection (1), “default” includes—