13-3-405. Acceptance of drafts and bills of exchange.
(a) Drafts or bills of exchange, drawn upon a bank having not more than six (6) months' sight to run, may be accepted by a bank. Letters of credit may be issued by a bank only if they are based upon actual commercial or agricultural transactions.
(b) No bank shall accept drafts or bills of exchange or issue letters of credit for any one (1) person or entity to an amount equal at any time in the aggregate to more than twenty percent (20%) of its paid up and unimpaired capital and surplus plus twenty percent (20%) of its unimpaired undivided profits unless the bank is secured either by attached documents or by some other actual security growing out of the same transaction. The aggregate amount of acceptances of letters of credit to any one (1) person or entity shall not at any time exceed the paid-up unimpaired capital and surplus and unimpaired undivided profits of the bank.
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