ACT 372 BANKING AND FINANCIAL INSTITUTIONS ACT 1989
PART IX - RESTRICTIONS ON BUSINESS OF LICENSED INSTITUTIONS
Section 60. Grant of secured and unsecured credit facilities.
(1) Subject to an order made by the Bank under subsection (2), no licensed institution shall give to any person any credit facility without security.
(2) The Bank may by order published in the Gazette permit any particular licensed institution, or any class, category or description of licensed institutions, to give to any person any credit facility without security which, together with any other credit facility without security earlier given to him, does not exceed an aggregate amount set out in the order.
(3) Subsection (1) shall not apply to any credit facility given-
(a) to another licensed institution;
(b) to any other person engaged in the provision of finance who is approved in writing by the Bank; or
(c) by any licensed bank or licensed merchant bank, except where the credit facility is given by such bank or merchant bank to its related corporation which is not an institution or other person referred to in paragraphs (a) and (b) respectively.
[Am. Act A954:s.33]
(4) A security in respect of a credit facility given to any person by a licensed institution shall consist of property of a value which is not less than the amount of the credit facility given to such person.
(5) Where a security provided in respect of a credit facility given by a licensed institution is, during the currency of the credit facility, by agreement between the licensed institution and the person providing the security, substituted by a different security, the new security shall be of a value which is not less than the amount of the credit facility which is outstanding at the time of said substitution.
(6) Where at any time during the currency of a credit facility, any security provided under subsection (4) or substituted under subsection (5) in respect of such credit facility decreases in value to a value which is lesser than the amount of the credit facility then outstanding, the licensed institution shall require the person to whom such credit facility is given to provide additional security so as to increase the value of the security to an amount which is not lesser than the amount of the credit facility then outstanding within a period not exceeding fourteen days, and if such additional security is not provided within such period, the person liable for the credit facility shall immediately thereupon be deemed to be in breach of the terms of the contract relating to the credit facility, and the institution shall be entitled to enforce its rights under the contract in respect of a breach thereof.
(7) Nothing contained in this section shall affect the right of the parties to the contract relating to the credit facility from including in such contract at the time at which it is entered into, or at any time thereafter, any provision relating to the security to be provided for the credit facility which is intended to ensure the sufficiency of the security throughout the currency of the credit facility.
(8) For the purposes of this section, the value of any property which is provided as security shall be-
(a) the market value thereof; or
(b) where for any reason it is not possible to determine the market value thereof, the value approved by the Bank on an application by the person taking the security which should set out the value arrived at by the applicant and the basis for it;
(9) For the purposes of this section, the Bank may prescribe-
(a) any limitations, restrictions and conditions subject to which any particular property, or any class, category or description of properties, may be provided or accepted as security; or
(b) for any particular property, or any class, category or description of properties, to be prohibited from being provided or accepted as security.