Banking (Amendment) Act (No. 2 of 2005)

Sri Lanka Consolidated Acts

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Banking (Amendment) Act (No. 2 of 2005) - Sect 20

Amendment of section 47 of the principal enactment

20. Section 47 of the principal enactment is hereby amended as follows :-

(1) by the repeal of subsections (2), (3), (4) and (5) of that section and substitution therefor of the following subsections:-

"(2) A licensed commercial bank shall not grant accommodation for the purchase of its own shares nor grant accommodation against the security of-

(a) its own shares;

(b) shares of companies which have a substantial interest in it: or

(3) A licensed commercial bank shall not grant any accommodation to any of its directors or to a close relation of such director unless such accommodation is sanctioned at a meeting of its Board of Directors with not less than two-thirds of the number of directors constituting the Board of Directors (other than the director concerned) voting in favour of such accommodation and, except where such accommodation is provided by the issue of a credit card, such accommodation is secured by such security as may from time to time be approved by the Monetary Board.

	(4) Accommodation granted by a licensed commercial bank to a director or to a close relation of such director shall not exceed such limit as may be approved by the Monetary Board from time to time by Order published in the Gazette.

(5) A licensed commercial bank shall not grant any accommodation to a concern in which any director of the licensed commercial bank has a substantial interest, being an interest acquired either before or after the appointment as the director, unless such security as may from time to time be approved by the Monetary Board is given and such accommodation is sanctioned at a meeting of the Board of Directors of the licensed commercial bank by the votes of not less than two thirds of the number of its directors other than the Director concerned.".

(2) by the repeal of subsections (11) and (11A) of that section and substitution therefor of the following subsections:

	"(11) No accommodation granted by a licensed commercial bank under subsection (3) or subsection (5) or any part of such accommodation or any interest due thereon shall be remitted without the prior approval of the Monetary Board and any remission without such approval shall be void and of no effect.

	(11A) Where any accommodation is granted by a licensed commercial bank under subsection (3) or subsection (5) during the course of any financial year, such accommodation shall be disclosed in the accounts for that financial year and for each subsequent financial year till such accommodation has been repaid or settled in full.".

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