Section 21: Maintenance of Reserve Account of banks

21. Maintenance of Reserve Account of banks (1) Subject to subsection (2), every bank shall maintain a Reserve Account and shall transfer each year to the Reserve Account out of the net profits of that year, after due provision has been made for income tax, a sum equal to not less than 15 per cent of the net profits until the balance in the Reserve Account is equal— (a) in the case of a bank incorporated in Mauritius, to the amount paid as stated capital; (b) in the case of a bank incorporated outside Mauritius and having a branch in Mauritius, to the amount of its assigned capital. (2) Where a bank makes a loss, the net loss shall be set off against any profit made in subsequent years until a position of net cumulative profit is reached and the transfer to the Reserve Account specified in subsection (1) shall be calculated and made on the net position. (3) No profit shall be transferred and no dividend shall be declared unless the transfer specified in subsection (1) has been made, but the central bank may, where it considers the balance held in the Reserve Account of the bank to be adequate, declare, by order in writing directed to the bank, that subsection (1) shall not apply to that bank for such period and subject to such conditions as may be specified in the order.