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Aishath Muneeza, Ismail Wisham, Rusni Hassan,
International Islamic University Malaysia
specified restricted purposes have been relaxed and banks
can now form subsidiary companies for carrying on the
business of Mudaraba.
In 1980 through another amendment and addition of subsection
(ee) in Section 7, banks were allowed the purchase of
properties, moveable or immovable, exclusively for being
leased out or for being sold on hire-purchase basis or on
deferred payment basis with mark-up. Banks were also
allowed to underwrite the issue of Mudaraba Certificates and
Participation Term Certificates Forms of business in which
banking companies may engage has been further amended
on December 31, 1984 and clause (ee) in section 7 of
Banking Companies Ordinance has been substituted. 1
The Banking Tribunal Ordinance 1984 also provides that
anyone who intentionally destroys or removes or reduces
(without the prior approval of the bank) the value of property
on the security of which finance was provided or transfers
such property or any part of it, is punishable with
imprisonment extending up to five years in addition to a fine.
The tribunal may further order the refund of the value of the
property destroyed, removed, reduced or transferred. If the
person guilty of the above offences is a company then the
same punishments can be awarded to its chief executive,
executive directors, managers, secretary or any other officer
unless they prove their innocence in the commission of the
offence. All offences under the Banking Tribunals Ordinance
1984 are bailable, non-cognizable and compoundable. A
Banking Tribunal is to consist of two members and a
chairman who has been or qualifies for appointment as a
Judge of High Court or a District Judge. In civil jurisdiction
the tribunal carries the powers vested in a civil court under
the Code of Civil Procedure 1908 while in criminal
jurisdiction it carries the powers vested in a Court of
Sessions under Code of Criminal Procedure.
1 "Purchase or acquisition in the normal course of its banking business of
and property, including commodities, patents, designs, trade-marks and
copy rights, with or without buy-back arrangements by the seller, or for
sale in the form of hire-purchase or on deferred payment basis with markup
or for leasing or licensing or for rent-sharing or for any other mode of
financing."
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