Section 22: Liquid assets of banks

22. Liquid assets of banks (1) Every bank shall maintain in Mauritius adequate and appropriate forms of liquidity and comply with any guidelines or instructions issued by the central bank in relation thereto. (2) The level of liquidity to be maintained by a bank may be expressed as a percentage of such of that bank’s deposits and other liabilities, including contingent liabilities, as may be determined by the central bank, averaged on a basis to be fixed by the central bank. (3) Notwithstanding any guidelines or instructions issued under subsection (1), the central bank may, by order in writing, direct a bank to provide additional liquidity in such form and amounts and within such time frame as may be determined by the central bank. (4) In determining the additional liquidity referred to in subsection (3), the central bank shall in each case have regard to— (a) the nature, scale and risks of the bank’s operations; (b) other financial resources available to the bank; (c) the relationship between the bank’s liquid assets and its actual or contingent liabilities; (d) the times at which the liabilities shall or may fall due and the assets mature. B3 – 21 [Issue 3] Banking Act (5) For the purposes of this section— “liquid assets” includes cash, balances with banks in Mauritius, balances with the central bank, balances with foreign banks and freely tradable securities denominated in freely convertible currencies as may be specified by the central bank and notified to the bank, Bank of Mauritius Bills, Government securities, and such other assets, of such classes and maturities and for such other aggregate figures, as may be specified by the central bank and notified to the bank. [S. 22 amended by s. 2 (i) of Act 18 of 2008 w.e.f. 19 July 2008.]