MONEYLENDERS ACT 1951

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 400 MONEYLENDERS ACT 1951 As at 1 October 2017 2 MONEYLENDERS ACT 1951 First enacted … … … 1951 (Ord. No. 42 of 1951) Revised … … … 1989 (Act 400 w.e.f 14 December 1989) Latest amendment made by P.U. (A) 204/2017 which came into operation on … … … 1 August 2017 PREVIOUS REPRINTS First Reprint … … … … 2001 Second Reprint … … … … 2006 3 LAWS OF MALAYSIA Act 400 MONEYLENDERS ACT 1951 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title and application 2. Interpretation 2A. Non-application of Act and exemption therefrom 3. (Deleted) 4. Appointment of Registrar, Deputy Registrar, Inspector, and other officers and servants 4A. Delegation of powers of Registrar PART II LICENSING OF MONEYLENDERS 5. Licence to be taken out by moneylender 5A. Application for licence 5B. Grant of a licence 5 C. Duration of licence 5 D. Conditions attached to licence 4 Laws of Malaysia ACT 400 Section 5E. Renewal of licence 5F. Requirement to display licence 6. Particulars to be shown on licences 7. (Deleted) 8. Offences 9. Circumstances under which licence shall not be issued 9A. Revocation or suspension of licence 9B. Opportunity of being heard 9 C. Appeal to Minister 9 D. Validity of licence extended in successful appeal 9E. Prohibition of subsequent application pending appeal on earlier application 9F. Surrender of licence 9 G. Transfer or assignment of licence prohibited 9H Approval and notification of change of profile 10. (Deleted) PART III INVESTIGATION, SEARCH, SEIZURE AND ARREST 10A. Powers of Inspector or police officer in investigation 10B. Power to investigate complaints and inquire into information 10C. Power to examine persons 10D. Search by warrant 10E. Power of arrest 10F. Search without warrant 10G. Seizure of movable property 10GA. Additional powers 10GB. Access to computerized data 10H. Further provisions relating to seizure of movable property 10 I. Obstruction of inspection and search Moneylenders Section 10J. Authority to act 10K. Release of property seized PART IV EVIDENCE 10 L. Evidence of accomplice and agent provocateur 10M. Protection of informers and information 10N. Admissibility of statements by accused persons 10O. Provisions as to evidence 10OA. Presumption as to the business of moneylending 10OB. Evidence and records of previous conviction 10OC. Diary of proceedings in investigation PART V CONDUCT OF MONEYLENDING BUSINESS 10P. Licensee and borrower must enter into a moneylending agreement 11. Advertisement by licensee 11A. Application for advertisement permit 12. No circular implying a banking business to be issued 13. (Deleted) 14. (Deleted) 15. Contract by unlicensed moneylender unenforceable 16. Moneylending agreement to be given to the borrower 17. Prohibition of compound interest 17A. Interest for secured and unsecured loans 5 6 Laws of Malaysia ACT 400 Section 18. Duty to keep original copy of moneylending agreement and accounts in permanent books 19. Obligation to supply information as to state of loan and copies of documents relating thereto 20. Provisions as to bankruptcy proceedings for licensees' loans 21. Accounts under section 19 to be produced when suing in Court 22. (Deleted) 23. Prohibition of charge for expenses on loans by licensee 24. (Deleted) 25. Notice and information to be given on assignment of licensee's debts 26. Application of Act as respects assignees PART VI MISCELLANEOUS 27. Attestation of moneylending agreement 27A. Prohibition of employing an agent or canvasser 27B. Moneylending agreement in which amount is not truly stated or left blank 28. (Deleted) 29. False statements or representations to induce borrowing an offence 29A. General offences 29AA. Prohibition of assisting unlicensed moneylending 29B. Harassment or intimidation, etc. of borrower 29C. Offences by companies, societies, firms or other body of persons 29D. Prosecution 29E. Service of notification or document 29F. Power to compound 29G. Jurisdiction 29H. Power to make regulations Moneylenders Section 29 I Reward to informer 29J Assignment of proceeds to the States of Sabah and Sarawak 29K. Power to amend First Schedule 30. (Deleted) 30A. (Deleted) 31. (Omitted) F IRST SCHEDULE F IRST SCHEDULE A SECOND SCHEDULE (Deleted) THIRD SCHEDULE (Omitted) 7 9 LAWS OF MALAYSIA Act 400 MONEYLENDERS ACT 1951 An Act for the regulation and control of the business of moneylending, the protection of borrowers of the monies lent in the course of such business, and matters connected therewith. [Peninsular Malaysia—31 March 1952] PART I PRELIMINARY Short title and application 1. (1) This Act may be cited as the Moneylenders Act 1951. (2) This Act shall apply to the whole of Malaysia. Interpretation 2. In this Act, unless the context otherwise requires— “Authority” has the same meaning assigned to it in the Local Government Ordinance 1961 [Sabah Ord. 11/1961]; “authorized name” and “authorized address” mean respectively the name under which and the address at which a moneylender is authorized by a licence granted under this Act to carry on business as a moneylender; 10 Laws of Malaysia ACT 400 “borrower” means a person to whom money is lent by a moneylender; “company” means any body corporate being a moneylender; “Deputy Registrar” means the Deputy Registrar of Moneylenders appointed under section 4; “firm” means an unincorporated body of two or more individuals or one or more individuals and one or more corporations or two or more corporations who have entered into partnership with one another with a view to carrying on business for profit; “Inspector” means an Inspector of Moneylenders appointed under section 4; “interest” does not include any sum lawfully charged in accordance with this Act by a moneylender for or on account of stamp duties, fees payable by law and legal costs but, save as aforesaid, includes any amount by whatsoever name called in excess of the principal paid or payable to a moneylender in consideration of or otherwise in respect of a loan; “licence” means a moneylender’s licence issued under this Act; “licensee” means any moneylender to whom a licence has been issued under section 5B; “local authority” has the same meaning assigned to it in the Local Authorities Ordinance 1996 [Sarawak Ord. 20/1996]; “Minister” means the Minister charged with the responsibility for local government; “moneylender” means any person who carries on or advertises or announces himself or holds himself out in any way as carrying on the business of moneylending, whether or not he carries on any other business; Moneylenders 11 “moneylending” means the lending of money at interest, with or without security, by a moneylender to a borrower; “moneylending agreement” means an agreement made in writing between a moneylender and a borrower for the repayment, in lump sum or instalments, of money borrowed by the borrower from the moneylender; “Perbadanan Labuan” has the same meaning assigned to it in the Perbadanan Labuan Act 2001 [Act 609]; “police officer” means a police officer as defined in the Police Act 1967 [Act 344]; “prescribed” means prescribed by regulations made under this Act; “principal” means, in relation to a loan, the amount actually lent to and received by the borrower; “Registrar” means the Registrar of Moneylenders appointed under this Act. “senior police officer” means a senior police officer as defined in the Police Act 1967. Non-application of Act and exemption therefrom 2A. (1) This Act shall not apply to a person specified in the First Schedule, and such person shall be subject to any written law governing his business or activity. (2) The Minister may— (a) in consideration of the special circumstances relating to the nature of the business of any company, or the objects of any society, and its financial standing; and 12 Laws of Malaysia (b) ACT 400 if he is satisfied that it would not be contrary to the public interest to do so, by notification in the Gazette exempt such company or society from all or any of the provisions of this Act, and such exemption shall be granted for such duration as may be specified in the notification, and may be made subject to such limitations, restrictions or conditions as the Minister may specify in the notification. (3) The Minister may at any time revoke any exemption granted by him under subsection (2) if he is satisfied, after giving the company or society concerned an opportunity to be heard, that the company or the society, as the case may be, has failed to observe any limitation, restriction or condition subject to which the exemption was granted, or that it is otherwise no longer suitable to continue to be granted exemption. 3. (Deleted by Act A1193). Appointment of Registrar, Deputy Registrar, Inspector, and other officers and servants *4. (1) For the purposes of this Act, the Minister may appoint a Registrar of Moneylenders and such number of Deputy Registrars of Moneylenders, Inspectors of Moneylenders and other officers and servants as the Minister may deem fit from amongst members of the public service, officer of Perbadanan Labuan in the Federal Territory of Labuan, officer of the Authority in the State of Sabah and officer of the local authority in the State of Sarawak. (2) The Registrar and Deputy Registrars shall have and may exercise any of the powers conferred on an Inspector by or under this Act. * NOTE—For saving and transitional provision of this section–see subsection 46(1), (8) and (9) of Act A1193. Moneylenders 13 Delegation of powers of Registrar 4A. (1) The Registrar may, in writing, delegate all or any of his powers or functions under this Act, except his power of delegation, to any Deputy Registrar or Inspector appointed under section 4. (2) Without prejudice to subsection (1), the Registrar may, in writing, delegate any of his powers or functions under this Act in respect of the investigation of offences under this Act and the enforcement of the provisions of this Act to any public officer, officer of Perbadanan Labuan in the Federal Territory of Labuan, officer of the Authority in the State of Sabah and officer of the local authority in the State of Sarawak. (3) Any delegation under subsection (1) or (2) may be revoked at any time by the Registrar and does not prohibit the Registrar from himself exercising the powers or performing the functions so delegated. PART II LICENSING OF MONEYLENDERS Licences to be taken out by moneylender 5. (1) No person shall carry on or advertise or announce himself or hold himself out in any way as carry on or advertise or announce himself or hold himself out in any way as carrying on the business of moneylending unless he is licensed under this Act. (2) Any person who carries on or advertises or announces himself or holds himself out in any way as carrying on the business of moneylending without a valid licence, or who continues to carry on such business after his licence has expired or been suspended or revoked shall be guilty of an offence under this Act and shall be liable to a fine of not less than two hundred and fifty thousand ringgit but not more than one million ringgit or to imprisonment for a term not exceeding five years or to both, and in the case of a second or 14 Laws of Malaysia ACT 400 subsequent offence shall also be liable to whipping in addition to such punishment. Application for licence *5A. (1) An application for a licence to carry on business as a moneylender shall be made in writing to the Registrar in a prescribed form, and accompanied by such documents or information as may be prescribed. (2) The Registrar may in writing, at any time after receiving the application but before it is determined, require the applicant to provide w