45. Minimum cash balances

The Authority may by notice in writing to each Islamic bank require such banks to maintain minimum cash balances, not exceeding 30 per cent of each Islamic bank’s deposit and other liabilities, on deposit with the Authority as reserves against their deposit and other liabilities. In determining the minimum amount or amounts of cash balances to be maintained with the Authority, the Authority shall have due regard to the nature of deposits in Islamic banking business.

Subject to the limit specified in subsection (1), the Authority may specify different ratios for different types of liabilities and may further specify the method of computing the amount of the required reserves, but the ratios shall be uniform for all Islamic banks.

No specification of, or change in, the minimum reserve requirements under subsection (1) or (2) shall take effect before the expiry of 30 days notice in writing to each Islamic bank of the Authority’s intention to take the action.

Where an Islamic bank (in this section referred to as the defaulting Islamic bank) has failed to maintain minimum cash balances as required under subsection (1), the Authority may in writing direct the defaulting Islamic bank to make good the deficiency within such period as may be specified and the defaulting Islamic bank shall comply with such requirements.

If the defaulting Islamic bank fails to make good the deficiency within the period specified under subsection (4), the Authority may serve notice in writing on any other bank in Brunei Darussalam (in this section referred to as the debtor bank) with which the defaulting Islamic bank has a credit balance, whether in current or deposit account, directing that debtor bank to transfer to the Authority the full amount of such credit balance; and,

No action shall lie against, and no liability shall attach to, the debtor bank for any loss or damage suffered by the defaulting Islamic bank as a result of the debtor bank taking action in compliance with the requirements of the notice under subsection (5).

Without prejudice to any action that may be taken by the

An Islamic bank which fails or refuses to pay the penalty under subsection (7) is guilty of an offence and liable on conviction to a fine not exceeding $150,000.