Single borrower limits of banks

(1) The aggregate of unsecured loans, advances and extensions of credit granted by a bank to a person and not secured by collateral having a marketable value as determined by reliable and current valuations at least equal to the total amount of the loan, advances and extensions of credit shall not exceed fifteen per centum of the fully paid-up and unimpaired reserves of a licensee. (2) Except with the prior written approval of the Central Bank, total loans, advances and extensions of credit by a bank to a person shall not exceed twenty-five per centum of the fully paid-up and unimpaired capital and reserves of a licensee. These limitations shall be separate from and in addition to the limitations contained in sub-section (1). (3) For the purposes of sub-section (1) and (2)– (a) the term “loan, advances and extensions of credit” shall include all loans, advances, overdrafts, holdings of papers and all direct and indirect obligations of the borrower as well as off-balance sheet commitments, such as acceptances and guarantees on behalf of the underwriting facilities, endorsements, placements, documentary credits issued, performance bonds and other contingent liabilities on behalf of such person or any other facility or instrument that the Central Bank may specify in writing; and (b) the term “person” shall include any group of persons which is under the control of one and the same person. 29 (4) The limitations contained in sub-section (1) or (2) shall not apply to– (a) loans, advances and extensions of credit to the Government of Belize; (b) loans, advances and extensions of credit fully secured by bonds, debentures, notes and treasury bills of the Government of Belize or by other such obligations fully guaranteed as to principal and interest by the Government of Belize; (c) loans, advances and extensions of credit fully secured by the Government of Belize; or (d) loans, advances and extensions of credit fully secured by a segregated and pledged deposit account in the lending bank. (5) A licensee shall not grant any loans, advances or extensions of credit against the security of its own shares.