As enacted

Contents

19. Amendment of section 46 of the principal enactment

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

Section 46 of the principal enactment is hereby amended as follows :—

(1)

by the repeal of subsection (1) of that section and the substitution therefor of the following subsection :—

“(1)

In order to ensure the soundness of the banking system, the Monetary Board may issue directions to licensed commercial banks or for reasons to be stated in writing to any one or more of them regarding the manner in which any aspect of the business of such bank or banks is to be conducted and without prejudice to the foregoing, may, also issue directions specifying —

(a)

the class or classes of advances which may or may not be made by such bank;

(b)

the margins to be maintained in respect of secured advances;

(c)

the maximum amount of accommodation which having regard to the equity capital, reserves and deposits of such licensed commercial bank and other relevant considerations, as may be made by such bank —

(i)

to any single company, public corporation, firm, association of persons or an individual; or

(ii)

in the aggregate to —

(a)

an individual, his close relations or to a company or firm in which he has a substantial interest;

(b)

a company and one or more of the following: —

(aa)

its subsidiaries;

(bb)

its holding company;

(cc)

its associate company;

(dd)

a subsidiary of its holding company; or

(ee)

a company in which such company or its subsidiary, or its holding company, or a subsidiary of its holding company, has a substantial interest;

(d)

the maximum percentage of the share capital in a licensed commercial bank incorporated in Sri Lanka —

(i)

held by a company, an incorporated body, or an individual;

(ii)

held in the aggregate by—

(a)

a company and one or more of the following:—

(aa)

its subsidiaries;

(bb)

its holding company;

(cc)

a subsidiary of its holding company; or

(dd)

a company in which such company or its subsidiary, or its holding company, or a subsidiary of its holding company has a substantial interest; or

(b)

an individual and one or more of the following :—

(aa)

his close relations;

(bb)

a company in which he has a substantial interest or in which his close relation has a substantial interest;

(cc)

the subsidiary of such company;

(dd)

a holding company of such company;

(ee)

a subsidiary of such company’s holding company;

(ff)

a company in which such company, or its subsidiary, or its holding company or a subsidiary of its holding company has a substantial interest; or

(gg)

an incorporated body other than a company in which such individual or his close relation has a substantial interest; or

(c)

companies in each of which an individual or company as the case may be, has either directly, indirectly or beneficially a substantial interest or significant management interest.

For the purposes of this Act a company is deemed to be an “associate company”

of another company where not less than twenty per centum and not more than fifty per centum of its shares are held by that other company.";

(2)

by the repeal of subsection (4) of that section.

Read on from s 20