Malaysia legislation
Section 16
Section 16
(2)
The minimum amount or amounts of the assets so prescribed to be held shall be expressed in the form of—
(a)
a percentage or percentages which such assets shall bear to the sight, savings account, time and other deposit liabilities of each Islamic bank and such other liabilities thereof as may be determined by the Central Bank, either jointly or separately; and
(b)
a percentage which such assets shall bear to the investment account of each Islamic bank;
and such percentage or percentages may be varied by the Central Bank from time to time by notice in writing to the bank.
nd the aggregate equate for its mpt the bank or a period of all transfer to profits of each been made for e reserve fund less than one the paid-up not less than e net profits.
e reserve fund of the paid-up less than fifty its;
time to time Islamic bank assets to be
: of the .
uts of the assets used in the form shall bear to the " and all bear to the nic bank;
nereor as may Bank, either be varied by notice in writing
(3)
Whenever the Central Bank issues a notice under subsection (1) each Islamic 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)
An Islamic 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, lend or advance any money to any person.
(5)
For the purpose of computing the minimum amount or amounts of liquid assets under this section and the sight, savings account, investment account, time and other deposit liabilities of an Islamic bank carrying on business in Malaysia and elsewhere and such other liabilities of such bank as may be determined by the Central Bank, the offices and branches of such bank in Malaysia shall be deemed to constitute a separate bank carrying on business in Malaysia.
(6)
For the purposes of this section liquid assets shall be—
(a)
notes and coin which are legal tender in Malaysia;
(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)
investment certificates issued under the Government Investment Act 1983; and
(d)
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 Islamic bank to render such return or returns as the Central Bank deems necessary for the implementation of this section.
(8)
Any Islamic 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 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 Islamic bank which fails or refuses to pay a penalty under subsection (8) shall be guilty of an offence under this Act.