Malaysia legislation
Section 69
of MALAYSIA DEPOSIT INSURANCE CORPORATION (AMENDMENT) ACT 2016
Section 69
“Priority of payments in the winding up of a deposit-taking member
The principal Act is amended by inserting after section 134
the following sections:
“Priority of payments in the winding up of a deposit-taking member carrying on Islamic banking business 134a. (1) Without prejudice to section 134, in the winding up of a deposit-taking member which has been approved under paragraph 15(1)(a) of the Financial Services Act 2013
to carry on Islamic banking business—
(a)
the assets of the deposit-taking member acquired in the course of its business other than its Islamic banking business, shall be applied to meet the liabilities incurred in the course of its business other than the Islamic banking business, in the order set out in section 134; and
(b)
where the assets of the deposit-taking member referred to in paragraph (a) is in surplus after payment has been made to meet its liabilities under paragraph (a), such surplus assets of the deposit-taking member shall be applied to meet the liabilities of the deposit-taking member under subsection (2).
(2)
Without prejudice to section 134, in the winding up of a deposit-taking member which has been approved under paragraph 15(1)(a) of the Financial Services Act 2013 to carry on Islamic banking business—
(a)
the assets acquired by the deposit-taking member in the course of its Islamic banking business—
(i)
shall not be subject to the debts of the deposit-taking member except in respect of its Islamic banking business or as provided in paragraph (b); and
Malaysia Deposit Insurance Corporation (Amendment)
(ii)
shall be available to meet all liabilities of the deposit-taking member in respect of its Islamic deposits in Malaysia in priority to all other unsecured liabilities incurred in the course of its Islamic banking business, other than the preferential debts set out in subsection 292(1)
of the Companies Act 1965 in the order set out in that subsection and the debts due and claims owing to the Government under section 10 of the Government Proceedings Act 1956, which is attributable to its Islamic banking business as may be specified by the Corporation and the order of priority for payments of different categories of Islamic deposits may be prescribed by regulations made under section 209; and
(b)
where the assets of the deposit-taking member referred to in paragraph (a) is in surplus after payment has been made to meet its liabilities under subparagraph (a)(ii), such surplus assets of the deposit-taking member shall be applied to meet the liabilities of the deposit-taking member including the liabilities of the deposit-taking member under section 134 in the order of priority stated therein.
(3)
Notwithstanding subparagraph (2)(a)(ii), regulations may be prescribed under section 209 to determine and classify the assets available and the application of the disposal proceeds thereof in order to meet any or any part of the liabilities of the deposit-taking member.
Priority of payments in the winding up of a deposit-taking member that is an Islamic bank 134b. (1) In the winding up of a deposit-taking member that is an Islamic bank in or outside Malaysia, the assets of the deposit-taking member shall be available to meet all liabilities of that deposit-taking member in respect of its Islamic deposits in Malaysia in priority to all other unsecured liabilities of that deposit-taking member other than the preferential debts set out in subsection 292(1) of the Companies Act 1965 in the order set out in that subsection and the debts due and
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claims owing to the Government under section 10 of the
Government Proceedings Act 1956 and the order of priority for payments of different categories of Islamic deposits may be prescribed by regulations made under section 209.
(2)
Notwithstanding subsection (1), regulations may be prescribed under section 209 to determine and classify the assets available and the application of the disposal proceeds thereof in order to meet any or any part of the liabilities of the deposit-taking member.”.
Amendment of section 135