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

WHAT ARE THE LEGISLATIONS GOVERNING THE BANKING AND FINANCE BUSINESSES IN MALAYSIA ?

The main legislation governing the banking and financial institutions in Malaysia is the Banking and Financial Institution Act 1989.

This act is commonly known as BAFIA.

The Banking and Financial Institution Act 1989 main objective is to provide new laws

• for the licensing and regulation of the institutions carrying on banking, finance company, merchant banking, discount house and money broking business
• for the regulation of institutions carrying on certain other financial businesses and
• for the matters incidental thereto or connected therewith

With the introduction of the Banking and Financial Institution Act 1989 on 1st October 1989, the Malaysian banking and financial system has been provided with an integrated supervision.

Among others, there are the following Acts which also regulate and protect the economy and financial market of Malaysia :

• Exchange Control Act 1953
• Commodities Trading Act 1985
• Future Industry Act 1993
• Hire Purchase Act 1967
• Islamic Banking Act 1983
• Pengurusan Danaharta Nasional Berhad Act 1998
• Securities Commission Act 1993
• Securities Industry Act 1983
• Anti-Money Laundering Act 2001

In the event of any conflict between the above Acts and the Banking and Financial Institution Act 1989, the above Acts shall prevail. The Banking and Financial Institution Act 1989 shall not effect or derogate from the provisions of the above Acts.

WHICH ARE THE INSTITUTIONS IN MALAYSIA BEING COVERED UNDER THE BANKING AND FINANCIAL INSTITUTIONS ACT 1989 ?

There are 3 groups of institutions governed by the Banking and Financial Institutions Act 1989

• licensed institutions namely commercial banks, finance companies, merchant banks, discount houses and money brokers
• scheduled institutions which carry on building credit business, credit token business, development finance business, factoring business and leasing business and
• non-scheduled institutions which include institutions engaged in the provision of finance but other than those named above.