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Part IX · Restrictions on Business of Licensed Institutions

Section 61

(1)

No licensed bank, licensed merchant bank or licensed finance company shall give to any single person any credit facility, or incur any liability whatsoever on behalf of any single person, which, together with any credit facility given earlier to such single person, and any liability incurred earlier on his behalf, by such institution, exceeds an amount which is in excess of such percentage as may be prescribed for licensed banks, licensed merchant banks or licensed finance companies as a class or category, by the Bank in relation to such institution's capital funds, or, in the case of a licensed foreign bank, its net working funds unimpaired by losses or otherwise.

(2)

The provisions of subsection (1) shall not apply—

(a)

where the single person referred to therein is another licensed institution or any person specified by the Bank which is engaged in the provision of finance;

(b)

to any credit facility given to, or liability incurred on behalf of, any person by a licensed institution in respect of imports into or exports from Malaysia or trade within Malaysia against letters of credit or bills of exchange; or

(c)

to any transactions specified by the Bank which are entered into with any particular person, or any class, category or description of persons, as may be specified by the Bank.

(3)

Nothing in subsection (1) shall authorise a licensed discount house or a licensed money-broker to give to any person any credit facility or incur any liability on his behalf, without the prior written approval of the Bank, which approval may specify conditions subject to which such credit facility may be given or such liability incurred, as the case may be.

(4)

For the purposes of this section, in computing the amount of any credit facility given to a single person, or any liability incurred on behalf of a single person, any credit facility given to, or any liability incurred on behalf of, the following persons, shall be deemed to be a credit facility given to, or a liability incurred on behalf of, such single person:

(a)

where such single person is an individual, his or her spouse, child or family corporation;

(b)

where such single person is a corporation, its related or associate corporations.

(c)

where such single person is a society registered under any written law relating to co-operative societies, its subsidiaries as defined in section 2 of the Co-operatives Societies Act 1948, and the related or associate corporations of such subsidiaries; or

(d)

persons acting in concert with such single person:

Provided that the Bank may specify that all or any of the persons, or any particular person, or any class, category or description of persons, mentioned in the foregoing paragraphs shall be excluded in the application of this subsection in relation to any particular single person, or any class, category or description of single persons, to which a credit facility is to be given, and at the same time specify the criteria or the basis on which the said person or persons are to be so excluded.

(5)

For the purposes of subsection (4) (a), "family corporation" has the meaning assigned to it in section 46 (4).

Report

Read on from s 62

Part X

Powers of Supervision and Control Over Licensed Institutions

Read on from Part X

Part XI

Investigation, Search and Seizure

Read on from Part XI

Part XII

Application of Parts X and XI to Non-Scheduled Institutions Engaged in Provision of Finance

Read on from Part XII

Part XIII

Information and Secrecy

Read on from Part XIII

Part XIV

Offences

Read on from Part XIV

Part XV

General Provisions

Read on from Part XV

Part XVI

Read on from Part XVI

Schedules