Equipment financier Asset Finance Ltd has been warned by the Reserve Bank after exceeding related-party lending limits.
“Related party transactions played a significant part in the finance company failures that have occurred since 2006,” says the Reserve Bank notice.
The Reserve Bank has accordingly warned Asset Finance Limited for failing to comply with these legal requirement.
The legal requirements state that the aggregate credit exposures of a deposit taker, or its borrowing group, must not exceed a maximum limit of 15% of capital.
“This 15% limit was exceeded in the case of Asset Finance Limited,” adds the Reserve Bank’s warning notice, on its website.
