Section 29: Credit operations.

(1) The Bank may-
(a) grant advances for fixed periods not exceeding three months against publicly issued treasury bills of the Federal Government ;
(b) grant advances for fixed periods not exceeding one year at a minimum rate of interest of at least one per cent above the Bank's monetary policy rate against-
(i) gold coin or bullion
(ii) securities of the Federal Government which have been publicly offered for sale and are to mature within a period of twenty-five years:
Provided that no advance so secured shall at any time exceed seventy-five per cent of the market value of the security pledged and that the total of such securities held by the Bank is within the limitation imposed by section 28(g),
(iii) such bills of exchange and promissory notes as are eligible for purchase, discount or rediscount by the Bank up to seventy-five per cent of their nominal value,
(iv) warehouse warrants or their equivalent (securing possession of goods), in respect of staple commodities or other goods duly insured and with a letter of hypothecation from the owner :
Provided that no such advances shall exceed seventy-five per cent of the current market value of the commodities in question, or
(v) treasury certificates issued by the Federal Government:
Provided that no advances so secured shall at any time exceed seventy five per cent of the market value of the certificates pledged ;
(c) notwithstanding the provisions of section 34(d) of this Act, grant temporary advances to banks within the meaning of the Banks and Other Financial Institutions Act which participate in bank clearing in respect of temporary debit balances on their accounts at such rate of interest and under such terms as the Bank may, from time to time determine ;
(d) grant advances to any authority-
(i) for fixed periods not exceeding one year at a rate of interest which shall be at least one per cent above the Bank's monetary policy rate, and
(ii) except as prescribed in Sub-section (1)(e) of this section, upon, such conditions as the Bank may specify or as prescribed to ensure payment thereof with interest ;
(e) grant advances referred to in Sub-section (1)(d) of this section in any particular case where a guarantee in writing is given by the Federal Government to the Bank on behalf of any such authority so that-
(i) the total advances which may, subject to the provisions of this section, be granted shall not exceed an amount considered by the Bank to be adequate for the authority to commence its operations at the beginning of the crop or produce season,
(ii) such advances shall be secured so soon after the advances have been granted as may be agreed by the Bank (either in part or in whole) as prescribed in sub-section (1) (a) and (b) of this section and the said provisions shall be so construed ;
(f) any advance which may be granted by virtue of the provisions of Sub-section (1)( d) and (e) of this section shall be used solely for the purpose of financing-
(i) the purchasing and marketing operations authorized to be undertaken by any such authority by the law under which the authority was established or as may be approved by the Bank, and
(ii) With the approval of the Bank, other operations as may be incidental thereto:
Provided that any such authority may, if it so wishes, make advances to any, licensed buying agent (within the meaning of any law under which the authority was established) for the purchase of produce for sale to the said authority, and provided also that the quantity of produce to be so purchased is included in the estimated tonnage of crops against which total advances are to be made by the Bank.
(2) Paragraphs (d) to (f) of Sub-section (1) of this section relate to any authority of the Federal Government, State Government, Local Government or two or more State Governments including an interim authority established for such purpose by any law in operation in Nigeria.
(3) The reference in paragraphs (d) to (f) of Sub-section (1) of this section to the granting of advances includes a reference to the provision of credit facilities.