Development Financial Institutions Act 2002 · Updated to 6 Oct 2023 · Part IV · Obligations and Sourcing of Funds
40. Maintenance of assets in Malaysia
Feedback & supportUnless the Bank otherwise approves in writing, a prescribed institution shall hold at all times in Malaysia such minimum amount of assets as the Bank may specify.
Bank
“Bank” means the Central Bank of Malaysia established under the *Central Bank of Malaysia Act 2009;
For the purpose of subsection (1), the minimum amount of assets to be held in Malaysia shall be expressed as a percentage of all or such of the liabilities of the prescribed institution as the Bank may specify.
liabilities
“liabilities” includes debts, duties and obligations of every kind, whether present or future, or whether vested or contingent;
Any prescribed institution that contravenes subsection (1)
prescribed institution
“prescribed institution” means a development financial institution which is prescribed by the Minister under subsection 2(1);
commits an offence and shall on conviction be liable to a fine not exceeding fifty million ringgit.
For the purpose of subsection (1), the Bank may specify a period of not less than seven days within which the prescribed institution shall comply with the specification.
specify
“specify” means specify in writing by way of standards or any other forms;
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Power of Bank to specify other prudential requirements
*41. (1) The Bank may specify standards for other prudential matters to promote—
standards
“standards” includes any obligation or requirement as specified by the Bank under this Act and such standards may contain any interpretative, incidental, supplemental, consequential and transitional provisions; *NOTE—The Companies Act 1965 has been repealed by the Companies Act 2016 which comes into operation on 31 January 2017–see subsection 620(1)…
the sound financial position of a prescribed institution; or
integrity, professionalism and expertise in the conduct of the business, affairs and activities of a prescribed institution.
Without prejudice to the generality of subsection (1), standards specified under that subsection may include standards relating to—
corporate governance;
risk management; and
prevention of a prescribed institution from being used, intentionally or unintentionally, for criminal activities.
The Bank may, in the interest of the prescribed institution, specify standards on prudential matters under this section to a subsidiary of a prescribed institution.
subsidiary
“subsidiary” has the same meaning as in section 5 of the *Companies Act 1965;
Every prescribed institution and a subsidiary of a prescribed institution shall at all times—
comply with the standards as may be specified by the Bank under this section;
ensure that its internal policies and procedures are consistent with the standards as may be specified by the
Bank under this section; and
whether or not standards have been specified by the Bank under this section, manage its business, affairs and activities
*NOTE—General savings–see subsections 111(2) and (3) of the Development Financial Institutions
(Amendment) Act 2015 [Act A1502] which comes into operation on 31 January 2016.
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in a manner consistent with sound risk management and governance practices which are effective, accountable and transparent.
Every director and officer of a prescribed institution and a subsidiary of a prescribed institution shall at all times comply with the internal policies and procedures adopted by such institution or subsidiary including internal policies and procedures to implement the standards as may be specified by the Bank under this section.
director
“director” includes any person who occupies the position of a director, and includes a person in accordance with whose directions and instructions the directors or officers are accustomed to act and an Development Financial Institutions 19 alternate or substitute director, and without prejudice to the foregoing, in the case of— (a) a co-operative society, means a member of the board, or other governing body, of the co-operative society; (b) a statutory body, means a member of the board, committee, council or other governing body of the statutory body; (c) a partnership, means a partner; (d) a sole proprietorship, means the sole proprietor; and (e) any other body, association or group of persons, whether corporate or unincorporate, means a person having the direction and control of the management of its business or affairs;