Singapore legislation

Clause 38

Recommendations to banks concerning credits and investments

(1)

The Commissioner may, in respect of loans and advances or investments of banks, make recommendations to the banks in respect of the following: —

(a)

the purposes for which they may or may not be granted or made;

(b)

the maximum maturities or, in the case of loans and advances, the type and minimum amount of security which shall be required and, in the case of letters of credit, the minimum or margin deposit; or

(c)

the limits for any particular category of loans, advances or investments or for the total amount outstanding in respect of such loans, advances or investments.

(2)

Any recommendation made under subsection (1) of this section shall apply uniformly to all banks engaging in the transactions covered by the recommendation.

(3)

Where the Commissioner has made a recommendation under subsection (1) of this section which the banks have accepted without objections, or have failed to notify the Commissioner of their objections or have failed to forward their representations to him within the time specified in subsection (4) of this section he may, with the approval of the Minister, issue a direction in writing to each bank on any of the matters referred to in subsection (1) of this section requiring that effect be given to the recommendation within a reasonable time, and the banks shall comply with such direction.

(4)

Where the Commissioner has made a recommendation and the banks have, or any bank has, notified the Commissioner within fourteen days of the receipt of such recommendation that the banks, or any bank, objects to such recommendation, he shall call upon such banks or bank, as the case may be, to make representations in writing within one month of the notification concerning such objections.

(5)

Upon receipt of such representations, the Commissioner shall consider them and, with the approval of the Minister, may —

(a)

reject such representations; or

(b)

amend or modify the recommendation in accordance with the representations, or otherwise,and in either event, he shall thereupon issue a direction in writing, to such banks or bank as the case may be requiring that effect be given to the original recommendation or to the recommendation as subsequently amended or modified by him within a reasonable time, and the banks or any bank, as the case may be, shall comply with such direction.

(6)

The provisions of this section shall not apply to the Development Bank of Singapore, Limited.

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