Malaysia legislation
Section 26
Section 26
(2)
For the purpose of conducting monetary policy operations, the Bank—
(a)
may issue securities in its own name provided that the total amount of securities issued shall not at any time exceed the amount of the foreign reserves;
36 Laws of Malaysia ACT 701
(b)
may purchase, sell and redeem securities issued by the
Bank pursuant to paragraph (a);
(c)
may require a reserve to be held at the Bank by each financial institution;
(d)
shall have the powers set out in section 75, in particular paragraphs (c), (d), (e), (f), (g), (h), (i) and (l); and
(e)
may undertake such other financial transactions involving currencies, securities, precious metals or other commodities or financial instruments as approved by the
Monetary Policy Committee.
(3)
The terms and conditions of a requirement under paragraph
(2)
may include—
(a)
the principles and method for the determination of reserve;
(b)
the penalty which shall not exceed one-tenth of one per centum of the amount of the deficiency for every day during which the deficiency continues or other sanctions for any non-compliance with the requirement;
(c)
in the case of—
(i)
an Islamic financial institution, the returns which may be given; or
(ii)
any other financial institution, the interest which may be paid, by the Bank on the reserve.
Central Bank of Malaysia 37