Finance Companies Act · 2021 Revised Edition · Part · Reserve Funds, Dividends, Balance Sheets and Information
13A. Minimum cash balances
Official textFrom Attorney General's Chambers, unchanged
The Authority may require finance company to maintain minimum cash balances, not exceeding 30 per cent of each finance companys' deposit and other liabilities, on deposit with the Authority as reserves against their deposit and other liabilities.
Authority
"Authority" means the Brunei Darussalam Central Bank established by the Brunei Darussalam Central Bank Order, 2010 (S 103120 10); [S 1 7/2 02 I]
Subject to the limit specified in subsection (1). the Authority may prescribe different ratios for different types of liabilities and may further
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Finance Companies prescribe the method of computing the amount of the required reserves, but the ratios shall be uniform for all finance con~panies.
Any prescription of, or change in, the minimum reserve requirements under subsection (1) or (2) shall take effect only after the expiration of 30 days' notice to the finance companies of the Authority's intention to take such action.
Where a finance company (in this section referred to as the defaulting finance company) has failed to maintain sufficient minimum cash balances required under subsection (I), the Authority may by order in writing direct the defaulting finance company to make good the deficiency within the period specified in the order and the defaulting finance company shall comply with the requirements of the order.
finance company
"finance company" means any company licensed under this Act, to carry on financing business or Islamic financing business, and all branches and offices in Brunei Darussalam of such a company is deemed to be one finance company for the purpose of this Act:
If the defaulting finance company fails to make good the deficiency within the period specified in the order referred to in subsection (4), it shall be lawful. notwithstanding the provisions of any other written law, for the Authority to serve a notice in writing upon any other finance company with which the defaulting finance company has a credit balance. whether in current or deposit account, directing that finance company to transfer to the Authority such amount (not exceeding such credit balance) as is specified in the notice as being equivalent to the amount of the deficiency in the minimum cash balances of the defaulting finance company required under subsection (1) and the other finance company shall immediately comply with the requirements of that notice.
deposit
"deposit" means a sum of money received or paid on terms - (a) under which it will be repaid, with or without interest. or at a premium or discount; or (b) under which it is repayable, either wholly or in part, with any consideration in money or money's worth, such repayment being either on demand or at a time or in such 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. credit facility, advance, Finance Con?panies investment, saving, sale or sale and repurchase, but does not include money paid bonafide - (i) by way of an advance or a part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services is not or are not in fact sold, hired, or otherwise provided; (ii) by way of security for the performance of a contract or by way of security in respect of any loss • which may result from the non-performance of a contract; (iii) without prejudice to sub-paragraph (ii), by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise;
No action shall lie against' and no liability shall attach to, any finance company that complies with the requirements of a notice referred to in subsection (5) for any loss or damage suffered by the defaulting finance company as a result of the other finance company taking action in compliance with the requirements of that notice.
The Authority may, in addition to any action taken under subsections (4) and (5), impose on any finance company that fails to maintain sufficient minimum cash balances required under subsection (1) a penalty interest charge of $1,000 per day or such larger amount as the
Authority may determine for every day during which the deficiency continues.
Finance Companies
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Any finance company that fails or refuses to pay a penalty interest charge under subsection (7) is guilty of an offence against this Act.
punishable under section 34(1).
Terms defined in s 2
Authority
Defined · s 2"Authority" means the Brunei Darussalam Central Bank established by the Brunei Darussalam Central Bank Order, 2010 (S 103120 10); [S 1 7/2 02 I]
deposit
Defined · s 2"deposit" means a sum of money received or paid on terms - (a) under which it will be repaid, with or without interest. or at a premium or discount; or (b) under which it is repayable, either wholly or in part, with any consideration in money or money's worth, such repayment being either on demand or at a time or in such 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. credit facility, advance, Finance Con?panies investment, saving, sale or sale and repurchase, but does not include money paid bonafide - (i) by way of an advance or a part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services is not or are not in fact sold, hired, or otherwise provided; (ii) by way of security for the performance of a contract or by way of security in respect of any loss • which may result from the non-performance of a contract; (iii) without prejudice to sub-paragraph (ii), by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise;
finance company
Defined · s 2"finance company" means any company licensed under this Act, to carry on financing business or Islamic financing business, and all branches and offices in Brunei Darussalam of such a company is deemed to be one finance company for the purpose of this Act:
Part
Regulation of Business
Part
Minimum Liquid Assets
Part
Inspection of Finance Companies
Part 7
Part