Section 20: Minimum capital requirements of banks

20. Minimum capital requirements of banks (1) The central bank shall not grant, and no bank shall hold, a banking licence unless the bank maintains and continues to maintain in Mauritius, such amount paid as stated capital or such amount of assigned capital of not less than 200 million rupees or such equivalent amount in any freely convertible currency held in assets in or outside Mauritius, as may be approved by the central bank or such higher amount as may be prescribed, after deduction of the accumulated losses of the bank. (2) Subject to subsection (3), every bank shall maintain, in Mauritius, capital of not less than 10 per cent, or such higher ratio as may be determined by the central bank, of such of that bank’s risk assets and of other types of risks as may be specified by the central bank, the basis of computation, including the definition of capital and risk assets and other types of risks, being specified by the central bank. (3) The central bank may require a higher percentage or ratio from a bank, taking into account the requirement of subsection (4). (4) In determining the percentage specified in subsection (3) for different banks, the central bank shall have regard to— (a) the nature, scale and risks of the bank’s operations; (b) other financial resources available to the bank; and (c) the amount and nature of capital required, in the central bank’s opinion, to protect the interests of depositors and potential depositors and the public. (5) Notwithstanding subsection (2), in the case of a bank in receivership or in an action contemplated under Part IX of this Act, the central bank may temporarily set a different percentage or ratio. [Issue 3] B3 – 20 Revised Laws of Mauritius