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Banking and Financial Institutions Act 1989 · As enacted · Part IX · Restrictions on Business of Licensed Institutions

Section 62

(1)

Unless exempted by the Bank in writing with or without conditions, or except as provided under subsection (2) or (3), no licensed institution shall give any credit facility to—

(a)

any of its directors or officers or any other person receiving remuneration from it (other than any accountant, advocate, architect, estate agent, doctor and any other person receiving remuneration from it in respect of his professional services);

(b)

any body corporate or unincorporate, or a sole proprietorship, in which any of its directors or officers is a director or manager, or for which any of its directors or officers is a guarantor or an agent;

(c)

any corporation in which any of its directors or officers has any interest in the shares of that corporation; and

(d)

any person for whom any of its directors or officers has given any guarantee or other undertaking whatsoever involving financial liability.

(2)

A licensed institution may give to any of its officers or its executive director—

(a)

any loan which is provided for under his scheme of service; or

(b)

where there is no such provision and the institution is satisfied that special or compassionate circumstances exist, a loan not exceeding at any one time—

(i)

six months' remuneration of that officer or executive director; or

(ii)

his remuneration for such longer period as may be approved by the Bank, and subject to such other terms and conditions as the institution thinks fit.

(3)

The provisions of—

(a)

subsection (1) (a) shall not apply to the giving of any credit facility to the spouse, child or parent of an officer, including an executive director, of that licensed institution for the purchase of a house; and

(b)

subsection (1) (c) shall not apply to the giving of any credit facility by a licensed institution to—

(i)

a corporation in which any executive director or officer of that licensed institution has an interest in less than five per centum of the shares of that corporation;

(ii)

a corporation which is listed on a recognised stock exchange and in which no director, not being an executive director, of that licensed institution has any interest in more than five per centum of the voting shares of that corporation; or

(iii)

a corporation in which a director, not being an executive director, of that licensed institution has no interest in his personal capacity.

(4)

For the purposes of this section, "director" or "officer" includes a spouse, child or parent of a director or officer.

Terms defined in s 2

Bank
Defined · s 2
"Bank" means the Central Bank of Malaysia established by the Ordinance;
Open s 2
child
Defined · s 2
"child" includes a step-child and a person adopted as a child under any written law of Malaysia or of any country, territory or place outside Malaysia, or under any custom recognised by any class or category of persons in Malaysia or in any country, territory or place outside Malaysia;
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corporation
Defined · s 2
"corporation" has the meaning assigned thereto by the Companies Act 1965;
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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;
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director
Defined · s 2
"director" includes any person who occupies the position of a director, by whatever name called and, in particular, without prejudice to the foregoing, in the case of— (a) a corporation, has the meaning assigned thereto by the Companies Act 1965; (b) a co-operative society, means a member of the board, or other governing body howsoever called, of the co-operative society; (c) a statutory body, means a member of the board, committee, council or other governing body, howsoever called, of the statutory body; (d) a partnership, means a partner; (e) a sole proprietorship, means the sole proprietor; and (f) any other body, association or group of persons, whether corporate or unincorporate, means any person having the direction and control of the management of its affairs or business;
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licensed institution
Defined · s 2
"licensed institution" means any institution licensed or deemed to be licensed under section 6 (4);
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manager
Defined · s 2
"manager", in relation to an institution, means an officer of the institution by whatever name called, responsible for an office of the institution, or for a department or a division of such institution or of its office;
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officer
Defined · s 2
"officer", in relation to an institution, includes any employee and the chief executive of the institution;
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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;
Open s 2

Report

Read on from s 63

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