(1) Applications for loans from any association under this Part of this Act shall be in writing in the prescribed form, addressed to the secretary of the association.
(2) On receipt of any such application the directors shall proceed to consider the same, and if the application is approved shall apply to the Corporation to advance to the association the amount required to enable it to comply with the application:
provided that where the application is for a loan for a term not exceeding 6 months the association may, with the approval of the Corporation, arrange with any bank carrying on business in New Zealand, or with any other approved financial institution, for a loan to the association to enable it to grant the application:
provided further that where the application is for a longer term than 6 months the association, with the approval of the Corporation, may make temporary arrangements with any such bank or financial institution as aforesaid, and may defer application for an advance from the Corporation so long as satisfactory arrangements can be made with such bank or financial institution.
(3) The association shall not grant any application for a loan under this Part of this Act except on such security and subject to such terms and conditions as the Corporation may approve.
(4) All advances made by a bank or other financial institution to an association for the purposes of this Part of this Act shall be secured in such manner as the bank or other institution aforesaid may require.
(5) All advances made by the Corporation to an association for the purposes of this Part of this Act shall be secured in such manner as the Corporation may require.
(6) Without limiting the foregoing provisions of this section, the Corporation, or any bank or other financial institution as aforesaid, may require an association to assign or hypothecate, as security for any advance made to it as aforesaid, any securities given or to be given to the association by any of its shareholders in respect of loans under this Part of this Act.
(7) All securities given to an association by a shareholder therein in respect of any loan granted under this section out of money borrowed by the association from the Corporation shall be delivered to the District Intermediate Credit Supervisor and forwarded by him to the Corporation for safe custody.
(8) Save as provided in this section, an association shall have no power to borrow money or to create any charge or encumbrance on its assets.
(9) The interest payable on any loan granted by an association to a shareholder therein, as provided in this section, shall not exceed a rate from time to time fixed by the Corporation.
Section 52: amended, on 1 October 1946, by section 11 of the Rural Intermediate Credit Amendment Act 1946 (1946 No 5).
Section 52(7): amended, on 1 October 1946, by section 11 of the Rural Intermediate Credit Amendment Act 1946 (1946 No 5).
Section 52(9): amended, on 10 August 1978, by section 2(1) of the Rural Intermediate Credit Amendment Act 1978 (1978 No 14).