1981 BANKING LAW. COPYRIGHT RODERICK H. SEEMAN

Article 13 (The Provision of Credit to the same Person)

1. The provision of credit to the same person (including the provision of credit to parties who are in special relationship as determined by Cabinet Order with the said same person. Hereinafter in this Article, the same.) for each category as provided by Cabinet Order, must not exceed an amount (hereinafter in this Article referred to as "credit provision limit") obtained by multiplying the total of the said bank's capital and reserves (meaning matters provided for by Cabinet Order as reserves) by the percentage provided by Cabinet Order. However, these restrictions do not apply in those situations where the party receiving the credit by merger or transfer of business causes the limit of the provision of credit to the same person by the bank to be exceeded, and such other unavoidable reasons as provided for by Cabinet Order, when they have received the authorization of the Minister of Finance.

2. Where the bank has received authorization of Article 16-2, Paragraph 2 and holds the shares of another bank, the total amount of the provision of credit to the same person of the said bank and the other bank (hereinafter in this Article called "subsidiary bank") for each category as provided by Cabinet Order, must not exceed the total of the amounts listed hereunder (In Paragraph 4 called "total credit provision limit".) In this situation, the proviso of the previous paragraph apply mutatis mutandis.

(1) The credit provision amount of the said bank;

(2) The amount resulting from multiplying a rate provided by Cabinet Order against the amount ot the balance remaining after deducting from the total of the capital and reserves (meaning the reserves provided by Cabinet Order) of the subsidiary bank an amount determined by Cabinet Order as corresponding to the equity holdings of the said bank.

3. The provisions of the previous two Paragraphs shall not apply concerning the provision of credit to the national government and local public bodies, the provision of credit where the government makes guarantees concerning the repayment of principal and payment of interest, and other cases of providing credit corresponding to these, as provided for by Cabinet Order.

4. In the case of Paragraph 2, when the total amount of provision of credit to the same person exceeds the total credit provision amount, the amount of that excess shall be regarded as an amount of provision of credit of the bank holding the shares of the subsidiary bank.

5. In additiona to the matters provided for in the previous Paragraphs, the method of the calculation of the total amount of paid-in-capital and reserves and the amount of the limit for the provision of credit as provided for in Paragraphs 1 and 2, and other necessary matters in relation to the application of these provisions, shall be as provided for by Ordinance of the Ministry of Finance.