Islamic Banking Act 1983
Date of Royal Assent Date of publication in the Gazette 9-Mar-1983 10-Mar-1983
An Act to provide for the licensing and regulation of Islamic banking business. PU(B) 182/1983
[7th April 1983]
ARRANGEMENT OF SECTIONS PART I PRELIMINARY 1. Short title, commencement and application. 2. Interpretation. PART II LICENSING OF ISLAMIC BANKS 3. Islamic banking business to be transacted only by a licensed Islamic bank. 4. Minister may vary or revoke condition of licence. 5. Licence not to be granted in certain cases. 6. (Deleted). 7. Opening of new branches. 8. Islamic bank may establish correspondent banking relationship with bank outside Malaysia. 9. Licence fee. 10. Restriction of the use of certain words in an Islamic bank’s name.
11. Revocation of licence. 12. Effect of revocation of licence. 13. Publication of list of Islamic banks. 13A. Advice of Syariah Advisory Council. PART III FINANCIAL REQUIREMENTS AND DUTIES OF ISLAMIC BANKS 14. Maintenance of capital funds. 15. Maintenance of reserve funds. 16. Percentage of liquid assets. 17. Auditor and auditor’s report 18. Audited balance sheet. 19. Statistics to be furnished. 20. Information on foreign branches. PART IV OWNERSHIP, CONTROL AND MANAGEMENT OF ISLAMIC BANKS 21. Information on change in control of Islamic banks. 22. Sanction for reconstruction, etc., of bank required. 23. Disqualification of directors and employees of banks. PART V RESTRICTIONS ON BUSINESS 24. Restrictions on payment of dividends and grant of advances and loans. 25. Prohibition of loans, etc., to directors, officers and employees. 26. Restriction on grant of loan, advance or credit facility under section 25 (4). 27. Restriction of credit to single customer. 27A. Control of credit limits. 28. Disclosure of interests by directors. 29. Limitation on credit facility for purpose of financing the purchase or holding of shares. 30. Proof of compliance with sections 24, 25, 26, 27 and 29. PART VI POWERS OF SUPERVISION AND CONTROL OVER ISLAMIC BANKS
31. Investigation of banks. 32. Special investigation of banks. 33. Production of bank’s books and documents. 34. Banking secrecy. 35. Action to be taken if advances are against interests of depositors. 36. Banks unable to meet obligations to inform Central Bank. 37. Action by Central Bank if bank unable to meet obligations or conducting business to the detriment of depositors. 38. Effect of removal of office of director or appointment of a director of a bank by the Central Bank. 39. Control of Islamic bank by Central Bank. 40. Islamic bank under control of Central Bank to cooperate with Central Bank. 41. Extension of jurisdiction to subsidiaries of banks. 42. Moratorium. 43. Amendment of bank’s constitution. PART VII MISCELLANEOUS 44. Indemnity. 45. Priority of Islamic deposits. 46. Penalties on directors and managers. 47. Offences by directors, employees and agents. 48. Offences by companies, etc.,and by servants and agents. 49. Prohibition on receipt of commission by staff. 50. General penalty. 51. Power of Governor to compound. 52. Consent of the Public Prosecutor. 53. Regulations. 54. Bank holidays. 55. Application of other laws. 56. Exemption. PART VIII CONSEQUENTIAL AMENDMENTS 57. Amendment of Banking Act 1973.
58. Amendment of Companies Act 1965. 59. Amendment of Central Bank of Malaysia Ordinance 1958. 60. Amendment of Finance Companies Act 1969.
PART I PRELIMINARY
Short title, 1. (1) This Act may be cited as the Islamic Banking commencement Act 1983 and shall come into force on such date as the and application. Minister may by notification in the Gazette appoint. (2) This Act shall apply throughout Malaysia.
Interpretation. 2. In this Act unless the context otherwise requires— “branch” in relation to an Islamic bank includes a mobile branch of the bank and a branch established and maintained for a limited period only; 61/58.
“Central Bank” means the Central Bank of...