Islamic Banking Act · 2024 Revised Edition · Part · Prohibited Business
40. Financing secured by immovable property
Official textFrom Attorney General's Chambers, unchanged
Subject to subsection (2) an Islamic bank shall not grant any financing facilities which exceed in the aggregate 20 per cent of the amount of its deposits in Brunei Darussalam or such higher or lower percentage as the Authority may allow (including the deposits and borrowings from any other bank) on the security of immovable property for the purpose of purchasing, improving or altering such immovable property.
Islamic bank
“Islamic bank” means a company which carries on Islamic banking business and holds a licence granted under section 4 or 23, and includes all branches and offices in Brunei Darussalam of any such company for the purposes of this Act;
With the prior written consent of the Authority, any
Authority
“Authority” means the Brunei Darussalam Central Bank established by the Brunei Darussalam Central Bank Order, 2010;
Islamic bank whose business is principally to grant financing facilities on the security of immovable property may grant such financing facilities in an aggregate amount up to, but not in excess of 50 per cent of the amount of its deposits in Brunei Darussalam or such higher or lower percentage as the
financing facilities
“financing facilities” means — (a) the granting of financing and other facilities whereby a customer of the Islamic bank has access to funds or financial guarantees; or (b) the incurring by an Islamic bank of other liabilities on behalf of the customer;
Authority may allow after taking into consideration the nature and modalities of Islamic banking business (including the deposits and borrowings from any other bank at that Islamic bank).
Islamic banking business
“Islamic banking business” means business whose aims and operations are not contrary to Hukum Syara’ and which consists of receiving of deposits or other repayable funds from the public, paying or collecting cheques drawn by or paid in by customers, the granting of financing facilities to customers, and includes such other business as the Authority may authorise for the purposes of this Act;
Financing facilities secured solely by a mortgage, deed of trust, or other such instrument upon immovable property or by promissory notes or other obligations which are so secured, is, for the purpose of this section, financing facilities secured by immovable property; and where financing facilities are secured in part by a mortgage, deed of trust, or other instrument upon immovable property which is of less value than the amount of the financing facilities, or by promissory notes or other obligations which are so secured, then, for the purposes of this section, account shall be taken only of so much of the financing facilities as is equal to the value of the immovable property as a security as determined by a person appointed by the Authority.
Nothing in this section shall be construed as prohibiting an
Islamic bank from accepting as security for a financing facilities previously made in good faith without security or upon security subsequently found to be inadequate, a mortgage, deed of trust, or other instrument upon immovable property, or promissory notes or other obligations which are so secured.
Islamic Banking 52
An Islamic bank which contravenes subsection (1) or (2) is guilty of an offence and liable on conviction to a fine not exceeding $150,000.
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;
financing
Defined · s 2“financing” means the extension of credit, loans, advances, murabahah, leasing, instalment sale, istisna’ or any other modality that is not contrary to Hukum Syara’;
financing facilities
Defined · s 2“financing facilities” means — (a) the granting of financing and other facilities whereby a customer of the Islamic bank has access to funds or financial guarantees; or (b) the incurring by an Islamic bank of other liabilities on behalf of the customer;
Islamic bank
Defined · s 2“Islamic bank” means a company which carries on Islamic banking business and holds a licence granted under section 4 or 23, and includes all branches and offices in Brunei Darussalam of any such company for the purposes of this Act;
Islamic banking business
Defined · s 2“Islamic banking business” means business whose aims and operations are not contrary to Hukum Syara’ and which consists of receiving of deposits or other repayable funds from the public, paying or collecting cheques drawn by or paid in by customers, the granting of financing facilities to customers, and includes such other business as the Authority may authorise for the purposes of this Act;
Part
Minimum Assets Requirements
Part
Powers of Control Over Islamic Banks
Part
Overseas Branches and Representative Offices of Domestic Islamic Banks
Part
Unclaimed Balances
Part
Invitations to Make Deposits
Part