1964_BANKING_ORDINANCE — Page 67

66

CAP. 155]

Banking

[1987 Ed.

(ii) retain any investments included in computing such aggre- gate, for a period of not more than 3 months, or such longer period as may be approved by the Commissioner in writing in any particular case, from the date of the specifi- cation of the new limit, the imposition of the limit or, as the case may be, the withdrawal of the bank referred to in paragraph (c):

Provided that, in either case, no new advances or investments which are to be included in computing such aggregate are granted, incurred or made while the amount permissible under this section is so exceeded.

(9) No letter of comfort accepted by the Commissioner under subsection (3) or (4) in accordance with his powers under this section shall authorize any advances or investments which exceed in aggre- gate any limitations on such aggregate amount assured in the letter of comfort.

(10) For the purposes of this section-

(a) the expression "person" includes any partnership, any public body and any body of persons, corporate or unin- corporate;

(b) the expression "advances" shall include-

(i) any kind of advance, loan, (whether by way of deposit or otherwise) or credit facility, including an ir- revocable letter of credit to the extent to which it is not covered by a marginal cash deposit, given by an authorized institution; and

(ii) any financial guarantee given, or liability incurred. by an authorized institution;

(c) the expression "investments" shall mean any such holding by an authorized institution as is referred to in subsection (2)(b);

(d) advances, loans, facilities, guarantees or liabilities shall be deemed to be granted to and to be outstanding in relation to any person liable or contingently liable thereon whether as principal debtor, guarantor, or otherwise:

Provided that the reference in this paragraph to a guarantor shall not include a person (not being an author- ized institution) who guarantees the obligations of another under---

(i) a hire purchase agreement, that is to say an agree- ment for the bailment of goods under which the bailee may buy the goods, or under which the property in the goods will or may pass to the bailee; or

(ii) a conditional sale agreement, that is to say an agreement for the sale of goods under which the purchase price or part of it is payable by instalments, and the property in the goods is to remain in the seller (notwith- standing that the buyer is to be in possession of the goods)