Extension of credit to insiders

(1) A bank shall not grant or permit to be outstanding unsecured loans, advances and extensions of credit of an aggregate amount in excess of two per centum of the aggregate of its fully paid-up unimpaired capital and reserves or give any financial guarantees in excess of such amount without security, or incur any other liability in excess of such amount without security– (a) to or on behalf of any one of its directors, officers or principal shareholders, whether such loans, advances and extensions of credit are obtained by or on account of such director, officer or principal shareholder jointly or severally; or 30 (b) to or on behalf of any partnership, company or any similar entity or organisation in which the bank or any one or more of its directors, officers or principal shareholders as described in sub-section (2) of this section, is interested whether as a partner, director, officer or guarantor. (2) For purposes of this section, “principal shareholder” means a person who directly or indirectly or acting through or in concert with one or more persons, owns, controls or has the power to vote more than ten per centum of the voting power at any general or special meeting of a bank. Shares owned or controlled by a spouse, son, daughter, mother or father of a person are considered to be held by that person. (3) The aggregate of all loans, advances and extensions of credit described in this section shall not exceed fifty per centum of the fully paid-up and unimpaired capital and reserves of a