§ 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.