Lawyerment Homepage – Malaysian Financial Law – Banking Law – Bank Negara – BAFIA(banking and financial institutions act) Bank Negara Malaysia (BNM) is empowered to act as the regulator of banking institutions under the Financial Services Act (FSA), the. THE BANKING AND FINANCIAL INSTITUTIONS ACT, Introduction The in relation to deposit taking.e. from any person in Malaysia or outside Malaysia In.

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Powers of entry, search and seizure with warrant. Division 4 Representative office.

Bank Negara Malaysia

The Minister may, on the recommendation of the Bank, prescribe—. Non-contestability and remedies for misrepresentations. An institution, its director, malysia executive officer or senior officer who fails to comply with a direction issued under section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.

Knowledge of, and statement by insurance agent. The act provides powers to the bank to prevent money laundering and terrorism financingand every funds transferred from offshore banks in Malaysia to any other bank within or outside Malaysia that are above 1 million Bxfia Dollars incurs a 0. Foreign applicants There are currently no express rules specifically relating to a foreign applicant. Officially declared opened malaysiia Augustthe building is now known as Sasana Kijang.

Grant of licence by Minister. Single counterparty exposure limit for licensed person. Designation and revocation of designation of payment systems. A bank or financial institution. An investigating officer shall be deemed to be a public servant for the purposes of the Penal Code [ Act ], and to be a public officer for the purposes of the Criminal Procedure Code and the Evidence Act or any other written law which the Minister may, on the recommendation of the Bank, prescribe.


Banking and finance, capital markets, regulatory and compliance, restructuring and insolvency, Islamic finance, maritime and aviation. Legal and beneficial interest in shares.

The provisions of the Companies Act in relation to the winding up of companies shall apply to the winding up of an institution, unless specifically provided otherwise in this Division.

Information to be provided to auditor. International co-ordination and co-operation. Special requirements for SIFIs.

In the Straits dollarpegged at two shillings and fourpence 2s. Representative office in Malaysia of a foreign institution. Supporting information that is required includes, among others, detailed information on the applicant’s shareholders or in the case of a proposed branch the applicant’s corporate group such as:.

The Bank may issue one or more of the directions specified in section if the Bank is of the opinion that an institution, its director, chief executive officer or senior officer—. Application of certain provisions of Act to labuan entities. Lease-based financing under the concepts of al-ijarahal-ijarah muntahia bi al-tamlik and al-ijarah thumma al-bai.

Central bank In its role as the central bank, the BNM:. The Bank may appoint an officer of the Bank or any other person appointed under subsection 7 6 to be an investigating officer to conduct an investigation under this Division.

Establishment or acquisition of malajsia and acquisition or holding of material interest in corporation.

The character and integrity of the applicant, or if the applicant is a body corporate, its reputation malayzia being operated in a manner that is consistent with the standards of good governance and integrity. For the purposes of this Division, Division 2 and Schedule 7—.

Consolidated supervision Role and requirements.


Maintenance of accounting records and information. Establishment and maintenance of insurance funds. Computation of effective interest in shares. Application of this Act on payment systems. Many financial groups have subsidiaries and operations in more than one jurisdiction.

Banking regulation in Malaysia: overview

Duty to provide access to, and produce documents, information, etc. The Bank did not close the account as mwlaysia was no written authorisation from the Plaintiff.


The role of the audit committee is to:. Transfer the assets and liabilities of the non-viable member institution to the bridge institution on terms determined by the MDIC.

Advises the government on macroeconomic policies and managing the public debt. Under section 4 of the FSA, any person who is found guilty of breaching his duty of secrecy to a customer, shall be liable to imprisonment for a term not malaysiw 5 years or to a fine not exceeding RM10 million or both. Appointment of actuary by licensed insurer.

Power of Minister to declare holiday for licensed person. If the acquisition of a bank is to be made by way of an acquisition of business and assets, the prior approval of the Minister or BNM must be obtained. Holding out as authorized person or registered person. Have a majority of independent directors. Seeking opportunities for the approved representative office’s parent institution or related corporations to provide and participate in the management and syndication of foreign currency international loans or financing, or bond or sukuk issuances to or by the Government of Malaysia or statutory authorities.

BNM has issued guidelines known as the Liquidity Coverage Ratio and Statutory Reserve Requirement, which contain the applicable liquidity requirements. However, the term “universal bank” is not a recognised legal term in Malaysia.

As the duty of confidentiality is contractual between the banker and the customer, the remedy would be an action for breach of contract and possibly an action for defamation. The various committees described in Question 9 also play a role in the supervision of management.

Online resources Legislation W http: Guidelines issued by BNM.