Banking and Financial Institutions Act 1989 · As enacted · Part IX · Restrictions on Business of Licensed Institutions
Section 60
Official textFrom Laws of Malaysia Online, unchanged
Subject to an order made by the Bank under subsection (2), no licensed institution shall give to any person any credit facility without security.
The Bank may by order published in the Gazette permit any particular licensed institution, or any class, category or description of licensed institutions, to give to any person any credit facility without security which, together with any other credit facility without security earlier given to him, does not exceed an aggregate amount set out in the order.
licensed institution
"licensed institution" means any institution licensed or deemed to be licensed under section 6 (4);
Subsection (1) shall not apply to any credit facility given—
credit facility
"credit facility" means— (a) the giving of any advance, loan or other facility in whatever form or by whatever name called whereby the person to whom the same is given has access, directly or indirectly, to the funds of the person giving the same; (b) the giving of a guarantee in relation to the obligations of any person; or (c) any other dealing or transaction as may be prescribed by the Bank;
to another licensed institution;
to any other person engaged in the provision of finance who is approved in writing by the Bank; or
by any licensed bank or licensed merchant bank, except where the credit facility is given by such bank or merchant bank to its related corporation.
A security in respect of a credit facility given to any person by a licensed institution shall consist of property of a value which is not less than the amount of the credit facility given to such person.
person
"person" includes an individual, any corporation, statutory body, local authority, society, trade union, co-operative society, partnership and any other body, organization, association or group of persons, whether corporate or unincorporate;
Where a security provided in respect of a credit facility given by a licensed institution is, during the currency of the credit facility, by agreement between the licensed institution and the person providing the security, substituted by a different security, the new security shall be of a value which is not less than the amount of the credit facility which is outstanding at the time of said substitution.
agreement
"agreement" means an agreement whether formal or informal, oral or written, express or implied;
Where at any time during the currency of a credit facility, any security provided under subsection (4) or substituted under subsection (5) in respect of such credit facility decreases in value to a value which is lesser than the amount of the credit facility then outstanding, the licensed institution shall require the person to whom such credit facility is given to provide additional security so as to increase the value of the security to an amount which is not lesser than the amount of the credit facility then outstanding within a period not exceeding fourteen days, and if such additional security is not provided within such period, the person liable for the credit facility shall immediately thereupon be deemed to be in breach of the terms of the contract relating to the credit facility, and the institution shall be entitled to enforce its rights under the contract in respect of a breach thereof.
Nothing contained in this section shall affect the right of the parties to the contract relating to the credit facility from including in such contract at the time at which it is entered into, or at any time thereafter, any provision relating to the security to be provided for the credit facility which is intended to ensure the sufficiency of the security throughout the currency of the credit facility.
For the purposes of this section, the value of any property which is provided as security shall be—
property
"property" means any movable or immovable property and includes— (a) any right, interest, title, claim, chose in action, power or privilege, whether present or future, or whether vested or contingent, in relation to any property, or which is otherwise of value; (b) any conveyance executed for conveying assigning, appointing, surrendering, or otherwise transferring or disposing of immovable property whereof the person executing the conveyance is proprietor or possessed or wherein he is entitled to a contingent right, either for the whole interest or for any less interest; (c) any security, including any stock, share, debenture and fund; (d) any negotiable instrument, including any bank note, bearer note, Treasury bill, dividend warrant, bill of exchange, promissory note, cheque and negotiable certificate of deposit; (e) any mortgage or charge, whether legal or equitable, guarantee, lien or pledge, whether actual or constructive, letter of hypothecation or trust receipt, indemnity, undertaking or other means of securing payment or discharge of a debt or liability, whether present or future, or whether vested or contingent; and (f) any other tangible or intangible property;
the market value thereof; or
where for any reason it is not possible to determine the market value thereof, the value approved by the Bank on an application by the person taking the security which should set out the value arrived at by the applicant and the basis for it;
For the purposes of this section, the Bank may prescribe—
prescribe
"prescribe", where no mode is mentioned, means prescribe from time to time by order published in the Gazette, and a power to prescribe includes the power to make different provisions in the order, or in other mode of prescribing, for different persons, classes, categories or descriptions of persons;
any limitations, restrictions and conditions subject to which any particular property, or any class, category or description of properties, may be provided or accepted as security; or
for any particular property, or any class, category or description of properties, to be prohibited from being provided or accepted as security.
Terms defined in s 2
agreement
Defined · s 2"agreement" means an agreement whether formal or informal, oral or written, express or implied;
corporation
Defined · s 2"corporation" has the meaning assigned thereto by the Companies Act 1965;
credit facility
Defined · s 2"credit facility" means— (a) the giving of any advance, loan or other facility in whatever form or by whatever name called whereby the person to whom the same is given has access, directly or indirectly, to the funds of the person giving the same; (b) the giving of a guarantee in relation to the obligations of any person; or (c) any other dealing or transaction as may be prescribed by the Bank;
licensed bank
Defined · s 2"licensed bank" means a bank licensed or deemed to be licensed under section 6 (4);
licensed institution
Defined · s 2"licensed institution" means any institution licensed or deemed to be licensed under section 6 (4);
licensed merchant bank
Defined · s 2"licensed merchant bank" means a merchant bank licensed or deemed to be licensed under section 6 (4);
merchant bank
Defined · s 2"merchant bank" means a person which carries on merchant banking business;
person
Defined · s 2"person" includes an individual, any corporation, statutory body, local authority, society, trade union, co-operative society, partnership and any other body, organization, association or group of persons, whether corporate or unincorporate;
prescribe
Defined · s 2"prescribe", where no mode is mentioned, means prescribe from time to time by order published in the Gazette, and a power to prescribe includes the power to make different provisions in the order, or in other mode of prescribing, for different persons, classes, categories or descriptions of persons;
property
Defined · s 2"property" means any movable or immovable property and includes— (a) any right, interest, title, claim, chose in action, power or privilege, whether present or future, or whether vested or contingent, in relation to any property, or which is otherwise of value; (b) any conveyance executed for conveying assigning, appointing, surrendering, or otherwise transferring or disposing of immovable property whereof the person executing the conveyance is proprietor or possessed or wherein he is entitled to a contingent right, either for the whole interest or for any less interest; (c) any security, including any stock, share, debenture and fund; (d) any negotiable instrument, including any bank note, bearer note, Treasury bill, dividend warrant, bill of exchange, promissory note, cheque and negotiable certificate of deposit; (e) any mortgage or charge, whether legal or equitable, guarantee, lien or pledge, whether actual or constructive, letter of hypothecation or trust receipt, indemnity, undertaking or other means of securing payment or discharge of a debt or liability, whether present or future, or whether vested or contingent; and (f) any other tangible or intangible property;
provision of finance
Defined · s 2"provision of finance" includes— (a) the lending of money; (b) leasing business; (c) factoring business; (d) the purchase of bills of exchange, promissory notes, certificates of deposit, debentures or other negotiable instruments; and (e) the acceptance or guarantee of any liability, obligation or duty of any person;
related
Defined · s 2"related", in relation to a corporation, means related within the meaning of section 6 of the Companies Act 1965;
Part X
Powers of Supervision and Control Over Licensed Institutions
Part XI
Investigation, Search and Seizure
Part XII
Application of Parts X and XI to Non-Scheduled Institutions Engaged in Provision of Finance
Part XIII
Information and Secrecy
Part XIV
Offences
Part XV