Clause 7

A bank shall not —

grant or permit to be outstanding to any one person, firm, corporation or company or to any group of companies or persons which such person, firm, corporation or company is able to control or influence any credit facilities to an aggregate amount of such credit facilities in excess of 30 per cent of the capital funds or, with the approval of the Authority, up to but not in excess of 100 per cent of the capital funds of the bank;

grant substantial loans which in the aggregate exceeds 50 per cent of its total credit facilities or such other percentage as the Authority may from time to time determine:Provided that paragraphs (a) and (b) shall not apply to —

transactions with the Government;

transactions between banks;

the purchase of telegraphic transfers or loans or advances made against telegraphic transfers;

any facilities granted against letters of credit or bills or guarantees or documents in respect of imports into or exports from Singapore; or

any other type of transactions which the Authority may from time to time approve;

grant any credit facility against the security of its own shares;

grant, whether directly or indirectly, unsecured credit facilities which in the aggregate and outstanding at any one time exceed the sum of $5,000 —

to any of its directors, whether those credit facilities are obtained by its directors jointly or severally;

to a firm in which it or any of its directors has an interest as a partner, manager or agent, or to any individual or firm of whom or of which any of its directors is a guarantor; or

to any corporation, other than a bank, that is deemed to be related to the bank as described in section 6 of the Companies Act (Cap. 185); or

grant to any of its officers other than a director, or its employees or other persons, being persons receiving remuneration from the bank (other than public, registered or licensed accountants, advocates and solicitors, architects, estate agents, doctors and any other persons receiving remuneration from a bank in respect of their professional services) unsecured credit facilities which in the aggregate and outstanding at any one time exceed one year’s emolument of that officer or employee or person.(2) In subsection (1)(d) and (e), “unsecured credit facilities” means credit facilities given without security, or in respect of any credit facility given with security, any part thereof which at any time exceeds the market value of the assets constituting that security, or where the Authority is satisfied that there is no established market value, on the basis of a valuation approved by it.(3) In subsection (1)(d), “director” includes the wife, husband, father, mother, son or daughter of a director.(4) All the directors of the bank shall be liable jointly and severally to indemnify the bank against any loss arising from the making of any unsecured credit facility or any credit facility which becomes unsecured under subsection (1)(d)(i), (ii) and (iii) whether the bank has contravened those provisions or not.(5) In this section, “substantial loan” means any credit facility granted by a bank to a single person, firm, corporation or company or to any group of companies or persons which such person, firm, corporation or company is able to control or influence which in the aggregate exceeds 15 per cent of the bank’s capital funds.(6) Any bank which contravenes any of the provisions of this section shall be guilty of an offence.”.