ACT 372
BANKING AND FINANCIAL INSTITUTIONS ACT 1989

PART I - PRELIMINARY



Section 2. Interpretation.


(1) In this Act, unless the context otherwise requires-

"advertisement" means the disseminating or conveying of information, invitation or solicitation by any means or in any form, including by means of-

"Advisory Panel" means the Advisory Panel established under subsection 31A (2) of the Central Bank of Malaysia Act 1958 [Act 519];

[Am. Act A954:s.3]

"agreement" means an agreement whether formal or informal, oral or written, express or implied;

"approved company auditor" has the meaning assigned thereto by the Companies Act 1965 [Act 125];

"arrangement" means an arrangement whether formal or informal, oral or written, express or implied;

"associate corporation" means a corporation where not less than twenty per centum and not more than fifty per centum of that corporation's shares are held by another corporation, the first-mentioned corporation thereby being an associate corporation of the other corporation;

"Bank" means the Central Bank of Malaysia established by the Central Bank of Malaysia Act 1958 [Act 519].
[Am. Act A954:s.3]

"bank" means a person which carries on banking business;

"banking and finance company" means a person holding both a licence to carry on a banking business and a licence to carry on a finance company business, granted under section 6(4);

[Ins. Act A1211:s.2]

"banking business" means-

"building credit business" means-



"business associate" of a person includes-

"capital funds" means paid-up capital and reserves, and includes, for the purposes of sections 37 and 61, the whole or any proportion of any other class, category or description of capital as may be specified by the Bank;

"chief executive", in relation to an institution, means a person, by whatever name called, who, either individually or jointly with one or more other persons, is responsible, subject to the authority of the directors, for the conduct of the business and the administration of the institution;

"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 recognized by any class or category of persons in Malaysia or in any country, territory or place outside Malaysia;

"company" has the meaning assigned thereto by the Companies Act 1965;

"constituent documents", in relation to an institution, means the statute, charter, memorandum of association and articles of association, rules and by-laws, partnership agreement, or other instrument, under or by which the institution is established and its governing and administrative structure and the scope of its functions, business, powers and duties are set out, whether contained in one or more documents;

"controller", in relation to an institution, means a person who-

and the word "control" shall be construed accordingly;

"co-operative society" means a co-operative society registered or deemed to be registered under the *Co-operative Societies Act 1948 [Act 287], or the *Co-operative Societies Ordinance of Sabah [Sabah Ord. 3/58], or the *Co-operative Societies Ordinance of Sarawak [Sarawak. Cap. 66], a farmers' organization registered under the Farmers' Organization Act 1973 [Act 109] or a fishermen's association registered under the Fishermen's Association Act 1971 [Act 44];

"corporation" has the meaning assigned thereto by the Companies Act 1965;

"credit facility" means-

"credit token business" [Deleted by Act A1211:s.2]

"deposit" means a sum of money received or paid on terms-
and such repayment being either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it, regardless whether the transaction is described as a loan, an advance, an investment, a saving, a sale or a sale and repurchase, but does not include money paid bona fide-

"depositor" means a person entitled to repayment of a deposit, whether made by him or any other person;

"derivative instrument" has the meaning assigned thereto under subsection (7);
[Ins. Act A954:s.2]

"development finance business" means-

"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-

"discount house" means a person which carries on discount house business;

"discount house business" means-

"document" includes-

on any substance, material, thing or article;

"effective date" means the relevant date or dates, as the case may be, notified by the Minister under section 1;

"electronic fund transfer"
[Deleted by Act A1211:s.2]

"electronic terminal" means an electronic device, other than a telephone operated by any person, through which a person may initiate an electronic fund transfer, and includes point-of-sale terminals, automated teller machines, and cash dispensing machines;

"established", in relation to-

"factoring business" means-

"finance company" means a person which carries on finance company business;

"finance company business" means-

[Am. Act A954:s.2]
"foreign company" has the meaning assigned thereto by the Companies Act 1965;

"foreign currency" means any currency other than Malaysian currency;

"foreign government" means the government of any country, territory or place outside Malaysia;

"foreign institution" means a person, not being a licensed institution or a scheduled institution, which carries on any business outside Malaysia which corresponds, or is similar, to the business of any licensed or scheduled institution whether or not such person has a representative office;

"Governor" means the Governor of the Bank, and includes the Deputy Governor of the Bank;

"holding company" has the meaning assigned to it under section 5 of the Companies Act 1965;

"individual" means a natural person;

"interest in a share" shall be construed as provided under section 6A (2) to (10), inclusive, of the Companies Act 1965 read with the following modifications thereto-

and, for the avoidance of doubt, it is hereby declared that "interest in a share" includes the legal ownership of a share;

"investment company" has the meaning assigned thereto under section 319 of the Companies Act 1965;

"Islamic bank" means a bank licensed under the Islamic Banking Act 1983 [Act 276];

"leasing business" means-

"liabilities" includes debts, duties and obligations of every kind, whether present or future, or whether vested or contingent;

"licence" means a licence granted or deemed to be granted under subsection 6 (4);

"licensed bank" means a bank, including a banking and finance company, licensed or deemed to be licensed under subsection 6 (4);

[Am. Act A1211:s.2]

"licensed business" means a business licensed or deemed to be licensed under subsection 6 (4);

"licensed discount house" means a discount house licensed under subsection 6 (4);

"licensed finance company" means a finance company, including a banking and finance company, licensed or deemed to be licensed under subsection 6 (4);

[Am. Act A1211:s.2]

"licensed foreign bank"; [Repealed by Act A954:s.2]

"licensed institution" means any institution licensed or deemed to be licensed under subsection 6 (4);

"licensed local institution"[Repealed by Act A954:s.2]

"licensed merchant bank" means a merchant bank licensed or deemed to be licensed under subsection 6 (4);

"licensed money-broker" means a money-broker licensed under subsection 6 (4);

"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;

"member", in relation to an institution which is-

"merchant bank" means a person which carries on merchant banking business;

"merchant banking business" means-


"minimum amount of capital funds" or "minimum amount of net working funds"'; [Repealed by Act A954:s.2]

"Minister" means the Minister for the time being charged with the responsibility for finance;

"money-broker" means a person which carries on money-broking business;


"money-broking business" means the business of arranging transactions between buyers and sellers in the money or foreign exchange markets as an intermediary in consideration of brokerage fees paid or to be paid, but does not include the buying or selling of Malaysian currency or foreign currencies as a principal in such markets;


"net working funds";[Repealed by Act A954:s.2]

"non-scheduled institution" means-

"office" includes the principal place of business, a branch, an agency, a mobile place of business, a place of business set up and maintained for a limited period only, an electronic terminal and any other place of business;

"officer", in relation to an institution, includes any employee and the chief executive of the institution;


"Ordinance"[Repealed by Act A954:s.3]

"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;

"premises" includes any land, building, structure or place;


"prescribe", where no mode is mentioned, means prescribe from time to time by order published in the
Gazette, and a power to prescribe includes the power to make different provisions in the order, or in other mode of prescribing, for different persons, classes, categories or descriptions of persons;

"property" means any movable or immovable property and includes-

"provision of finance" includes-

"public company" has the meaning assigned thereto by the Companies Act 1965;

"related", in relation to a corporation, means related within the meaning of section 6 of the Companies Act 1965;


"relative", in relation to a person, means-

"repealed Acts" means the Acts repealed under section 128 (1);

"representative office" means an office in Malaysia of a foreign institution;

"scheduled business" means any business specified in the Third Schedule;

"scheduled institution" means a person which carries on a scheduled business but does not include a co-operative society, a statutory body, a local authority, a licensed bank, a licensed finance company, or a licensed merchant bank, carrying on a scheduled business;

"securities" has the meaning assigned thereto under subsection 2(1) of the Securities Industry Act 1983 [Act 280];
[Ins.. Act A954:s.2]

"share", in relation to a corporation, means an issued share of the corporation and includes stock except where a distinction between stock and share is expressed or implied;

"specify", where no mode is mentioned, means specify from time to time in writing, and a power to specify includes the power to specify differently for different persons or different classes, categories or descriptions of persons;

"statutory body" means any authority or body, whether corporate or unincorporate, established, appointed or constituted by any written law, but does not include any local authority;

"subsidiary" has the meaning assigned thereto under section 5 of the Companies Act 1965;

(2) For the purpose of the definition of "relative" in subsection (1)-

(3) For the purposes of this Act-

(4) Where under any provision of this Act, power is given to the Bank to require any person, or where any person is required under any provision of this Act, to submit, produce or provide to the Bank any information, statement, statistics, return or document-

[Subs. Act A954:s.2]

(5) Any reference in this Act to "this Act" or "the
Central Bank of Malaysia Act 1958 [Act 519]" shall, unless otherwise expressly stated, be deemed to include a reference to any regulations, rules, orders, notifications or other subsidiary legislation made under this Act or the Central Bank of Malaysia Act 1958 [Act 519], as the case may be.
[Am. Act A954:s.3]

(6) The Minister, on the recommendation of the Bank, may from time to time by order published in the Gazette, vary, delete, add to, substitute for, or otherwise amend the definition of-

and upon such publication, the definition of "deposit" or "derivative instrument", as the case may be, as varied, deleted, added to, substituted for or otherwise amended, shall come into full force and effect and shall be deemed to be an integral part of this Act as from the date of such publication, or from such later date as may be specified in the order.
[Ins. Act A954:s.2]

(7) For the purposes of this Act-

[Ins. Act A954:s.2]
_______________________________________________
NOTE-
* Co-operative Societies Act 1948 [Act 287], Co-operative Societies Ordinance of Sabah [Sabah Ord. 3/58] and Co-operative Societies Ordinance of Sarawak [Sarawak Cap. 66] has since been repealed by Co-operative Societies Act 1993 [Act 502]-see s. 95 of Act 502.

**Paragraph (b) of the definition of "finance company business" shall have effect and shall be deemed always to have been an integral part of the principal Act as from the date of commencement of the principal Act-see Act A954.


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