[Section 73 heading substituted by section 22(a) of Act No. 20 of 2007]
| (a) |
shall not make investments with or grant loans or advances or other credit to any person, to an aggregate amount exceeding 10 per cent of such amount of its capital and reserves as may be prescribed, without first having obtained the permission of its board of directors, or of a committee appointed for such purpose (for the composition of which committee the prior written approval of the Authority has to be obtained), to make such investments or to grant such loans, advances or other credit; and |
| (b) |
shall in the event of the aggregate amount of investments, loans, advances and other credit contemplated in paragraph (a), relating to any private sector non-bank person, exceeding 800 per cent of such an amount of its capital and reserves as may be prescribed, be subject to such additional capital requirements as may be prescribed. |
[Section 73(1)(b) substituted by section 51 of Act No. 19 of 2003]
| (2) |
Notwithstanding anything to the contrary contained in this Act, a bank, controlling company, branch or branch of a bank— |
| (a) |
shall not without the prior written approval of the Authority make an investment with or grant a loan, advance or other credit to any private sector non-bank person, which transaction, either alone or together with any previous transaction or transactions entered into by it with that private sector non-bank person, results in the bank, controlling company, branch or branch of a bank being exposed to that private sector non-bank person to an amount exceeding 25 per cent of a prescribed amount; |
| (b) |
shall in such manner and on such a form as may be prescribed report to the Authority whenever it makes an investment with or grants a loan or advance or other credit to any person other than a private sector non-bank person, which transaction, either alone or together with any previous transaction or transactions entered into by it with that other person, results in the bank, controlling company, branch or branch of a bank being exposed to that other person up to an amount exceeding 25 per cent of a prescribed amount; |
[Section 73(2)(b) amended by section 22(b) of Act No. 20 of 2007)
| (c) |
shall, in the event of the Authority granting such written approval as contemplated in paragraph (a), be subject to such additional capital requirements as may be prescribed; |
| (d) |
shall in the case of any exposure to an industry, sector or geographical area, that exceeds a prescribed amount, comply with such conditions or requirements as may be prescribed, including a requirement to maintain additional capital and reserve funds in respect of the said exposure; and |
[Section 73(2)(d) inserted by section 22(b) of Act No. 20 of 2007]
| (e) |
shall in such manner and on such a form as may be prescribed report such an investment in or such a loan or advance or other credit exposure to a specific industry, sector or geographical area, which investment, loan, advance or credit exposure, either alone or together with any previous investment, loan, advance or exposure, results in the bank, controlling company or branch of a bank being exposed to that industry, sector or geographical area up to an amount exceeding such a percentage of capital and reserve funds as may be prescribed. |
[Section 73(2)(e) inserted by section 22(b) of Act No. 20 of 2007]
| (3) |
For the purposes of this section— |
| (i) |
two or more persons, whether natural or juristic persons, the respective exposures to whom constitute a single exposure because of the fact that one of them directly or indirectly exercises control over the other or others; and |
| (ii) |
two or more persons, whether natural or juristic persons, between whom there exists no relationship of control as contemplated in subparagraph (i), but the respective exposures to whom are to be regarded as a single exposure because of the fact that they are so interconnected that should one of them experience financial difficulties, another one or all of them would be likely to experience a lack of liquidity; and |
| (b) |
"private sector non-bank person" means a person as defined in paragraph (a) but does not include— |
| (i) |
the central government or other public sector bodies; |
| (vi) |
a foreign institution that, under an authorization referred to in section 18A, conducts the business of a bank by means of a branch in the Republic; |
| (vii) |
a controlling company; or |
| (viii) |
any other person designated by the Authority. |
| (4) |
The Authority may, with the consent of the Minister, exempt, with such conditions as the Authority may determine, such exposures as the Authority may determine from the provisions of this section by means of a circular as contemplated in section 6(4). |
[Section 73(4) inserted by section 22(c) of Act No. 20 of 2007]
[Section 73 substituted by section 15 of Act No. 36 of 2000]
Contingency Fees Act, 1997
