1964_BANKING_ORDINANCE — Page 73

72

Limitation on advances to employees.

Powers of Commissioner where moneys placed with foreign bank.

CAP. 155]

Banking

[1987 Ed.

85. (1) An authorized institution shall not grant to any one of its employees any facility specified in subsection (2) to an aggregate amount of such facilities in excess of one year's salary for the employee.

(2) For the purposes of subsection (1) the following facilities are specified-

(a) the granting, or permitting to be outstanding, of unsecured advances, unsecured loans or unsecured credit facilities including unsecured irrevocable documentary letters of credit;

(b) the giving of unsecured financial guarantees; and

(c) the incurring of any other unsecured liability.

(3) Every director and every manager of an authorized institution which contravenes this section commits an offence and is liable

(a) on conviction upon indictment to a fine of $100,000 and to imprisonment for 12 months; or

(b) on summary conviction to a fine of $50,000 and to imprisonment for 6 months,

and, in the case of a continuing offence, to a further fine of $5,000 for every day during which the offence continues.

86. (1) Where the Commissioner-

(a) has reason to believe that an authorized institution has granted to any foreign bank any advances, loans (whether by way of deposit or otherwise) or credit facilities; and

(b) is of the opinion that the extent or manner in which such advances, loans or credit facilities have been made is not in the interests of the depositors of the authorized institution,

he may, by notice in writing to the institution, exercise his powers under this section.

(2) A notice under this section may-

(a) prohibit the authorized institution from granting, after the date of the service of the notice, any advances, loans or credit facilities to the foreign bank specified in the notice and any other foreign bank so specified which the Commissioner has reason to believe is associated with the first-mentioned foreign bank;

(b) where any moneys are held at call, demand or notice by the authorized institution with any bank specified by the Commissioner in pursuance of his powers under paragraph (a), direct the institution forthwith to demand repayment of such moneys in accordance with the terms upon which they are held;