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(1) A bank or specialised deposit-taking institution shall not take financial exposure in respect of a person or a group of connected persons which  constitutes  in  the  aggregate,  a  liability  amounting  to  more  than twenty-five percent of the net own funds of that bank or specialised deposit- taking  institution  or  a  lower  percentage  that  the  Bank  of  Ghana  may prescribe.

(2) For purposes of subsection (1), an unsecured financial exposure shall not exceed ten per cent of the net own funds of a bank or specialised deposit-taking institution.

(3) For the purpose of this section, two or more persons constitute a group of connected persons if

(a)  a direct or indirect control relationship exists among them;

(b)  any other relationship exists to the extent that the financial soundness of any of them may affect the financial soundness of the other person;

(c) the same factors may affect the financial soundness of some persons or the group; or

(d)  as a result of the structure of their relationship, the other person  is  ultimately  responsible  for  or  benefits  from  the financial exposure outstanding.

(4)  For the purpose of this section, the Bank of Ghana

(a)  may provide guidance for banks and specialised deposit-taking institutions in determining whether a connection exists among a group of persons; and

(b) shall where it is uncertain that a connection exists, determine if a connection exists on an individual basis, based on the facts and circumstances of a group of persons.

(5) The Bank of Ghana may prescribe that a deposit with a bank outside the country solely for correspondent banking purposes

(a)  be subject to a higher limit; or

(b)  be exempt from the application of subsection (1).

(6) A bank or specialised deposit-taking institution shall within five days

(a)  report to the Bank of Ghana a financial exposure that exceeds the limits of this section; and

(b)  provide a written plan for remedying the violation as soon as practicable.

(7) The aggregate amount of all large financial exposures of a bank or specialised deposit-taking institution shall not at any time exceed the percentage level of net own funds prescribed by the Bank of Ghana having regard to the risk and vulnerability of the financial system.

(8) For  the  purpose  of  this  section,  in  computing  the  financial exposure  the  following  assets  that  may  be  held  as  collateral  shall  be deducted:

(a) cash deposit;

(b) hen on term deposit with the bank or specialised deposit-taking institution;

(c)  market value of treasury bills, Government securities, bank securities; and

(d) any other security of a similar nature approved by the Bank of Ghana.

(9) A financial exposure shall not be considered as secured unless it is adequately secured by a collateral having a market value of at least one hundred and twenty percent of the outstanding amount of the exposure throughout the term of the financial exposure.

(10) A bank or specialised deposit-taking institution which assumes financial exposure in contravention of this section shall pay to the Bank of Ghana a penalty calculated as the base rate of the bank or specialised deposit-taking institution and a risk premium of five percentage point of the over exposure.

(11) A director or key management personnel who contravenes a provision of this section is personally liable to pay to the Bank of Ghana, an administrative penalty of two thousand five hundred penalty units.