Section 28: Limitation on advances or credits

28. Limitation on advances or credits (1) No bank or non-bank deposit taking institution shall— (a) grant any advance or credit against the security of its own shares; (b) grant to, or permit to be outstanding from, its officers or employees unsecured advances or unsecured credit which, in the aggregate and in relation to any officer or employee, exceed the annual emoluments of that officer or employee; or (c) grant credits to, or permit to be outstanding from, or purchase securities issued by or the assets of, an affiliate in an amount which exceeds such maximum limit as may be determined by the central bank. (2) The central bank may determine the maximum limits of credits and off-balance sheet commitments, which a bank or non-bank deposit taking institution may grant to a related party and to all related parties. (3) Any transaction with any related party involving credit, or off balance sheet commitments and the acquisition of securities and other assets shall be made on substantially the same terms, including interest rates and collateral required, as those prevailing at the time for comparable transactions with other persons and may not involve more than the normal risk of repayment or present other unusual features. B3 – 23 [Issue 2] Banking Act (4) The central bank may issue guidelines governing related party transactions including limitation on such transactions, their approval process and their public disclosure.