Kedah Malay reserve land mortgage issue resolved


GEORGE TOWN: The mortgage problem faced by Malay reserve landowners in Kedah, who could not get bank loans using their properties as security since November last year, has been resolved.

The Kedah government, following an executive council meeting yesterday, declared financial institutions established under Malaysian law as “Malay”.

The state government’s decision means banks in Kedah can once again accept Malay reserve land as security and the relevant government agencies can now process the required paperwork.

“…the state executive council of the Kedah government that met yesterday agreed to declare financial institutions established under Malaysian law as ‘Malay’, as provided under Section 19 of the Kedah Malay Reservation Enactment for the purpose of accepting or holding mortgage,” states a letter issued today by the state land and mines director Md Zuki Siru.

“All land and mines offices and district offices in Kedah are instructed to accept applications to register Malay reserve land mortgages by financial institutions set up under Malaysian law.

“This order takes effect from Jan 12, 2017,” the letter states.

The letter, sighted by FMT, also states that an earlier letter dated Nov 16, which informed the government offices not to process banks’ applications related to Malay reserve land, is null and void.

The legal problem with Malay reserve land in Kedah started late last year following the court case Jamaluddin Jaafar versus Affin Bank Bhd.

The Court of Appeal in September decided that mortgages on Malay Reserve land with banks or financial institutions not listed in the second schedule of the Kedah Malay Reservation Enactment were null and void.

The ruling meant all institutions not on the second schedule could not accept Malay reserve land as security or mortgages for loans or funding applications.

The case is still pending at the Federal Court.

Gerakan Youth chief Tan Keng Liang, who highlighted the problem in the press earlier this month, thanked the state government, Menteri Besar Ahmad Bashah Md Hanipah and the exco members for solving the problem.

“The situation would have worsened if the state had waited for the Federal Court appeal to end.

“This is the right decision by the state government and Kedah Barisan Nasional, taking into account the impact of the issue on Kedahans and the state,” he said today.

It has been reported that over 80% of land in Kedah is Malay reserve land.