—(1) Subject to subsection (3), a bank shall not —
grant or permit to be outstanding to any one person or to any group of persons under the control or influence of any one person, any credit facilities if the aggregate amount of such credit facilities exceeds 25% of its capital funds or such other percentage not exceeding 100% of its capital funds as the Authority may approve;
grant substantial loans which in the aggregate exceeds 50% of its total credit facilities or such other percentage as the Authority may determine;
grant any credit facility against the security of its own shares;
grant, 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 the bank 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;
to a company in which any of its directors, whether legally or beneficially, owns more than 50% of the issued capital or in which any of its directors controls the composition of the board of directors, but excluding public companies the securities of which are listed on the Stock Exchange of Singapore or any other stock exchange which the Authority may approve, and the subsidiaries of such public companies; 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 any 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 emoluments of that officer or employee or person.
(2) Subsection (1)(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.
(3) Subsection (1)(b) shall not apply to a bank whose total Singapore dollar credit facilities to its customers, excluding banks, do not exceed $100 million.
(4) All the directors of a 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 subsequently becomes an unsecured credit facility under subsection (1)(d) whether the bank has contravened that provision or not.
(5) In this section —
“substantial loan” means any credit facility granted by a bank to a single person or to any group of persons under the control or influence of a single person which in the aggregate exceeds 15% of the bank’s capital funds;
the reference to “director” in subsection (1)(d) includes the wife, husband, father, mother, son or daughter of a director;
the composition of a company’s board of directors referred to in subsection (1)(d)(iii) shall be deemed to be controlled by a director of a bank if he by the exercise of some power exercisable by him without the consent or concurrence of any other person can appoint or remove all or a majority of the directors of that company; and
“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.