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• Library > Legal Subjects > Banking and Financial Law

Related Category

• Library > Legal Subjects > Litigation > Civil Matters

Related Topics

• Banking and Financial Legalese (Terms)
• Buying on Hire Purchase
• Commodities
• Danaharta Act
• Exchange Control Rules
• Offshore Banking
• Securities

WHAT ARE THE RESTRICTIONS ON INVESTMENT OF A BANK OR FINANCIAL INSTITUTION ?

No bank or financial institution shall acquire or hold any shares in other corporations and immovable property other than is necessary for the purpose of conducting its business except where it is taken by way of security for loans.

The Central Bank of Malaysia may approve the holding of shares in selected corporations.

Share may also be taken to satisfy a credit facility given, for example in a debt-equity swap.

Any such shares acquired shall be disposed of as soon as practicable but not later than 12 months or such longer period as the Central Bank of Malaysia may allow in any particular case, commencing on the date on which the same was acquired.

WHERE A BANK OR FINANCIAL INSTITUTION BECOMES INSOLVENT, WHO WILL HAVE THE PRIORITY IN PAYMENT ?

Where a bank or financial institution becomes unable to meet all or any of its obligations, or suspends payment to any extent

• the properties of the institution in Malaysia shall be available to meet all liabilities of that institution in respect of deposits in Malaysia in priority over all other liabilities of the institution in Malaysia.