Islamic Financial Services Act 2013 · s 57

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57.
Power of Bank to specify standards on prudential matters
(1) The Bank may specify standards on prudential matters to promote—
(a) the sound financial position of an institution; or
(b) integrity, professionalism and expertise in the conduct of the business, affairs and activities of an institution.
(2) Without limiting the generality of subsection (1), standards specified under that subsection may include standards relating to—
(a) capital adequacy;
(b) liquidity;
(c) corporate governance;
(d) risk management;
(e) related party transactions;
(f) maintenance of reserve funds;
(g) takaful funds; and
(h) prevention of an institution from being used, intentionally or unintentionally, for criminal activities.
(3) For purposes of paragraph (2)(e), “related party transactions”
means transactions with an institution involving—
(a) a director, officer or shareholder of the institution;
(b) a member of the Shariah committee of the institution;

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(c) any person in a position to influence or control the institution or affect the decisions of the institution;
(d) a relative or dependent of any person referred to in paragraph (a), (b) or (c); or
(e) any other person as may be specified by the Bank, which in the opinion of the Bank may cause the institution to be in a conflict of interest situation.

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s 57Power of Bank to specify standards on prudential matters

(1)

The Bank may specify standards on prudential matters to promote—

(a)

the sound financial position of an institution; or

(b)

integrity, professionalism and expertise in the conduct of the business, affairs and activities of an institution.

(2)

Without limiting the generality of subsection (1), standards specified under that subsection may include standards relating to—

(a)

capital adequacy;

(b)

liquidity;

(c)

corporate governance;

(d)

risk management;

(e)

related party transactions;

(f)

maintenance of reserve funds;

(g)

takaful funds; and

(h)

prevention of an institution from being used, intentionally or unintentionally, for criminal activities.

(3)

For purposes of paragraph (2)(e), “related party transactions”

means transactions with an institution involving—

(a)

a director, officer or shareholder of the institution;

(b)

a member of the Shariah committee of the institution;

Islamic Financial Services 87

(c)

any person in a position to influence or control the institution or affect the decisions of the institution;

(d)

a relative or dependent of any person referred to in paragraph (a), (b) or (c); or

(e)

any other person as may be specified by the Bank, which in the opinion of the Bank may cause the institution to be in a conflict of interest situation.