Section 11: General Reserve Fund and other Reserve Funds

11. General Reserve Fund and other Reserve Funds (1) The Board shall determine the net profits of the Bank for each financial year, after meeting all current expenditure for that year and after making such provision as it thinks fit for bad and doubtful debts, depreciation in assets, contributions to staff funds and superannuation funds and other contingencies. (2) The Bank shall establish a General Reserve Fund to which shall be allocated, at the end of every financial year of the Bank, 15 per cent of the net profits of the Bank. (3) The balance of the net profits for the financial year remaining after the allocation made under subsection (2) shall, subject to subsection (4), be paid into the Consolidated Fund as soon as practicable after the end of every financial year. (3A) Notwithstanding subsection (3), the Bank may, with the approval of the Board, create, out of its net profits, reserves for monetary policy purposes or such other specific purposes as the Bank may determine in conformity with accounting principles applicable to central banks and best international practices. (4) Subject to subsection (5), the balance in the General Reserve Fund shall be at least equivalent to the amount paid as capital of the Bank. (5) Where, at any time, the balance in the General Reserve Fund is less than the amount paid as capital of the Bank, the Bank shall endeavour to bring the balance to the required level. (6) No allocation under subsection (3) shall be made where, in the opinion of the Board— (a) the assets of the Bank are, or after such allocation would be, less than the sum of its liabilities and paid up capital; or (b) the Bank would not be in a financial position to conduct its activities properly. (7) The Bank may, at the end of any financial year, meet any loss incurred by it in that year from the General Reserve Fund. [S. 11 amended by s. 3 (b) of Act 9 of 2015 w.e.f. 14 May 2015.] PART IV – BOARD, MANAGEMENT AND STAFF