(1) A bank, specialised deposit-taking institution or financial holding company shall not grant or permit

(a) an outstanding financial exposure in respect of an insider of that bank, specialised deposit-taking institution or financial holding company, and

(b) the related interest of that insider, except  on  terms  which  are  non-preferential  in  all  respects  including creditworthiness, term, interest rate and the value of the collateral.

(2) A bank sppecilised deposit-taking institution or financial holding company shall not take a financial exposure in respect of an insider and the related interest of that insider if the aggregate of the financial exposure to the insider and its related interests exceeds ten percent of the net own funds of that bank, specialised deposit-taking institution or financial holding company.

(3) For  the  purpose  of  subsection  (2), an  unsecured  financial exposure to an insider and the related interests of that insider shall not exceed five per cent of the net own funds of a bank, specialised deposit- taking institution or financial holding company.

(4) Subject to subsection (7) of section 62, 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 financial exposure throughout the term of that financial exposure.

(5) A bank sppecilised deposit-taking institution or financial holding company shall not take a financial exposure in respect of the related parties and their related interests if the aggregate of the financial exposure exceeds  twenty  percent  of  the  net  own  funds  of  that  bank,  specialised deposit-taking institution or financial holding company.

(6) The board of directors of a bank or specialised deposittaking institution is the sole authority to approve or sanction a financial exposure of that bank or specialised deposit-taking institution to a related party of that bank, specialised deposit-taking institution or financial holding company or the related interest of that party.

(7) When calculating capital adequacy, a financial exposure that is in excess of a limit referred to in this section shall be deducted from capital.

(8) Despite subsection (7), a bank or specialised deposit-taking institution which contravenes a provision of this section shall pay to the Bank of Ghana an administrative penalty of one thousand penalty units.

(9)  For the purpose of this section,

(a) “related interest” as defined in section 156 includes other related individuals that the Bank of Ghana may determine as appropriate; and

(b) “non-preferential” means terms which are not more favourable than the terms offered under prevailing conditions to a person other than a person referred to under subsection (1).