Section 18
Demand deposits, dealings in foreign exchange etc. by finance companies
(1)
No finance company shall -
(a)
accept any deposit which is repayable on demand by cheque, draft or order drawn by a depositor on the finance company;
•
(b)
deal in gold or foreign exchange of whatever kind;
(c)
grant unsecured advances. unsecured loans or unsecured credit facilities which in the aggregate and outstanding at any one time exceed 10 per cent of the paid-up share capital and published reserves of the finance company and which as regards -
(i)
any individual director whether borrowing on his own account or jointly with another director;
(ii)
a firm in which it 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;
(iii)
any other person or body of persons whether incorporated or not, exceed at any time the sum of $5,000; and
(d)
grant or permit to be outstanding to any customer any advances, loans or credit facilities, or give financial guarantees or incur any other liabilities on his behalf to an aggregate amount of •
-
such advances, loans or credit facilities, guarantees or liabilities in excess of 60 per cent of the paid-up share capital and published reserves of the finance company:
Provided that, with the approval of the Authority, the percentage referred to in this paragraph may be increased to 100 per cent of the paid-up share capital and published reserves of the finance company.
Finance Companies
CAP. 89 19
(2)
In subsection (I)@) -
"directors" include the husband, wife, father, mother, son or daughter of a director:
"unsecured advances", "unsecured loans" or "unsecured credit facilities" mean advances, loans or credit facilities made without security or, in respect of any advance. loan or credit facility made 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 the Authority.
(3)
All the directors of a finance company shall be liable jointly and severally to indemnify a finance company against any loss arising from the making of any unsecured advance, loan or credit facility under subsection (l)(c)(ii) or (iii).