The Law of Moneylenders (Credit Community Lending) by R. K. Nandy | 2026*

Moneylending under the Moneylenders Act 1951 & Regulations (Act 400) offers a comprehensive guide to the laws governing Malaysia’s moneylending industry. Combining the principal Act, subsidiary regulations and relevant case law, it helps practitioners understand the legal and practical issues surrounding community credit lending.

Key Insights of The Law of Moneylenders (Credit Community Lending) by R. K. Nandy:

• Risks of a single loan: Section 10OA creates a rebuttable presumption that even one interest-bearing loan amounts to carrying on a moneylending business. An unlicensed lender may therefore need to prove otherwise.

• Disguised lending arrangements: Courts may examine the substance of sale and purchase agreements or investment contracts to identify concealed moneylending transactions. Agreements used to disguise illegal lending may be declared void and unenforceable under section 15.

• Recovery of the principal sum: The book considers restitution under section 66 of the Contracts Act 1950 alongside the “Detik Ria Guidelines”, including how proportionality, the significance of the illegality and the parties’ responsibility affect recovery.

• Compliance with prescribed requirements: Using the wrong agreement form, such as Schedule J for a secured loan, may affect enforceability. The book also examines judicial approaches to substantial compliance and specific waivers granted by the Registrar.

Essential Information of The Law of Moneylenders (Credit Community Lending) by R. K. Nandy:

• Nationwide application: Following the 2011 amendments, Act 400 applies throughout Malaysia.

• Regulatory requirements: The Act prohibits compound interest and requires prescribed agreement forms under Schedules J and K, together with attestation by authorised persons.

• Professional responsibilities: The book highlights the implications of Malaysian Bar Council Ruling 14.26 and the potential disciplinary and criminal consequences of involvement in unlawful moneylending, including under section 29AA.

Table of Contents of The Law of Moneylenders (Credit Community Lending) by R. K. Nandy:

Part One – Introduction to the Moneylenders Act 1951 (Act 400)

• Overview and Regulatory Framework of Act 400
• Recent Amendments; Significance of the 2003 (Act A1193) and 2011 (Act A1390) Amendments
• Core Issues in Moneylending Transactions: Legislation, Terminology, Principles and Practice
• Loans by Persons Other Than a Licensed Financial Institution or Licensed Moneylender
• “Moneylending”, “Friendly Loan” and “Carrying On Business as a Moneylender”
• Revealing a “Sham” Sale & Purchase Agreement in Illegal Moneylending
• Sham S&P as “Security Documentation” – The National Land Code (Act 828)
• Misuse of Two Contemporaneous Contractual Documents as Security
• Misuse of “Return on Investment”, “Dividends” etc. to Camouflage Illegal Moneylending
• S&P Agreement Forbidden by Law, Voidable or Void
• Applying the Principles of Restitution
• Section 66 Contracts Act 1950 and the Detik Ria Guidelines
• Total Failure of Consideration; Rescission and Restitution after Lim Swee Choo
• Allegation of Forgery and of Blank Documents – Burden of Proof
• Adverse Inference – Section 114(g) Evidence Act 1950
• The Parol Evidence Rule
• Malaysian Bar Council’s Rules & Rulings
• Prohibition of Assisting Unlicensed Moneylending (s. 29AA); Employing Agents or Canvassers (s. 27A)
• Moneylender’s Actions under Order 79 Rules of Court 2012
• Enforcement of Act 400
• E-Moneylending
• The Consumer Credit Act 2025 (Act 873): Credit Community Companies and the Consumer Credit Commission of Malaysia; Schedules; Application; Jurisdiction

Part Two – The Moneylenders Act 1951 (Act 400): Principal Legislation & Practice

Part I – Preliminary

• Section 1: Short Title, Scope and Purpose; Strict Adherence; Presumption of Settlement; Order 14 Summary Judgment
• Section 2: Interpretation: “Interest”, “Moneylender” and Proving the Business of Moneylending
• Sections 2A–4A: Non-application and Exemption; Registrar, Inspectors and Delegation of Powers

Part II – Licensing of Moneylenders

• Sections 5–5F: Licence, Application, Grant, Duration, Conditions, Renewal, Display; Compounding of Offences
• Sections 6–8: Particulars on Licences; Offences; Void Agreements under the Contracts Act 1950
• Sections 9–9H: Refusal, Revocation and Suspension; Hearing and Appeal; Surrender, Transfer and Change of Profile

Part III – Investigation, Search, Seizure and Arrest

• Sections 10A–10K: Inspectors’ Powers; Examination; Search by Warrant; Arrest; Seizure; Computerised Data; Release of Property

Part IV – Evidence

• Sections 10L–10OC: Accomplice and Agent Provocateur; Informers; Statements; Presumption as to the Business of Moneylending; Previous Convictions

Part V – Conduct of Moneylending Business

• Section 10P: Licensee and Borrower Must Enter into Moneylending Agreement
• Sections 11–12: Advertisement, Advertisement Permits and Renewal; No Circular Implying Banking
• Section 15: Contract by Unlicensed Moneylender Unenforceable; Dishonoured Cheques
• Section 16: Moneylending Agreement: Signing, Stamping, Delivery; False or Blank Amounts (s. 27B); Attestation (s. 27)
• Sections 17–17A: Prohibition of Compound Interest; Interest on Secured and Unsecured Loans
• Section 18: Duty to Keep Original Agreement and Accounts; Wrong Use of Prescribed Form
• Sections 19–21: Information on State of Loan; Bankruptcy Proceedings; Accounts Produced When Suing
• Sections 23–26: Charges for Expenses; Assignment of Debts; Application of Act to Assignees

Part VI – Miscellaneous

• Sections 27–27B: Attestation; Prohibition of Agents or Canvassers; Untrue or Blank Amounts
• Sections 29–29B: False Statements; General Offences; Assisting Unlicensed Moneylending; Harassment of Borrower
• Sections 29C–29K: Offences by Bodies; Prosecution; Compounding; Jurisdiction; Regulations; Informer Rewards; Sabah & Sarawak
• Sections 30–31: Deleted and Omitted Provisions

Index

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