Regulatory Alerts2022-01-31
Banking Corporation Business with Related Parties
The Supervisor of Banks issued Directive 312-1 to regulate transactions between banking corporations and related parties, aiming to limit indebtedness and ensure arm's-length commercial terms. The directive defines related parties, including controlling shareholders and officers, and imposes strict aggregate and individual indebtedness caps relative to the bank's capital. It mandates board-level approval for significant transactions, requires regular reporting to the Banking Supervision Department, and outlines procedures for handling deviations and exemptions.
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