Banks Act, 1990 (Act No. 94 of 1990)Chapter VII : Provisions relating to aspects of the Conduct of the Business of a Bank77. Restriction on investments with, and loans and advances to, certain associates |
| (1) | A bank which invests money in debentures or preference shares of any of its associates (excluding any such associate which is a subsidiary referred to in section 76(1), a bank or a mutual building society), or which lends or advances money to any such associate, or which provides guarantees in respect of liabilities of such associates, shall manage its transactions in such investments, loans, advances or guarantees in such a way that the sum of the amounts— |
| (a) | invested by it in debentures or preference shares of such associates (excluding debentures or preference shares which are convertible into ordinary shares), taken at the price at which they were acquired; |
| (b) | owing to it by such associates in respect of loans or advances granted by it; and |
| (c) | of such guarantees, |
does not at any time exceed ten per cent of the amount prescribed.
[Words following section 77(1)(c) substituted by section 13 of Act No. 42 of 1992]
| (2) | The sum of the amounts referred to in paragraphs (a), (b) and (c) of subsection (1) shall be calculated for the purposes of that subsection by deducting therefrom the amount by which the sum of the issued primary share capital and primary unimpaired reserve funds, referred to in section 76(1) of the bank exceeds the sum of the amounts referred to in paragraphs (a), (b) and (c) of section 76(1). |
| (3) | For the purposes of this section "associate" means an associate as defined in section 37(7). |
[Section 77(3) substituted by section 49 of Act No. 26 of 1994]