Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001)Chapter 1 : Funds and Trust Property held by Financial Institutions2. Duties of persons dealing with funds of, and with trust property controlled by, financial institutions |
A financial institution or nominee company, or director, member, partner, official, employee or agent of the financial institution or nominee company, who invests, holds, keeps in safe custody, controls, administers or alienates any funds of the financial institution or any trust property –
| a) | must, with regard to such funds, observe the utmost good faith and exercise proper care and diligence; |
| b) | must, with regard to the trust property and the terms of the instrument or agreement by which the trust or agency in question has been created, observe the utmost good faith and exercise the care and diligence required of a trustee in the exercise or discharge of his or her powers and duties; and |
| c) | may not alienate, invest, pledge, hypothecate or otherwise encumber or make use of the funds or trust property or furnish any guarantee in a manner calculated to gain directly or indirectly any improper advantage for any person to the prejudice of the financial institution or principal concerned. |
[Section 2 amended by section 157(a) and (b) of Act No. 45 of 2013]