RegAlert

Rule · CBSL · 27 Oct 2016 · Direction No. 2 of 2016

Central Bank of Sri Lanka Microfinance Act Directions No. 02 of 2016 on Statutory Reserve

capital

The Central Bank of Sri Lanka issued Directions No. 02 of 2016 under the Microfinance Act to mandate Licensed Microfinance Companies to maintain a statutory reserve. These directions require companies to transfer at least 5% of annual net profits to the reserve until it reaches 50% of stated capital, followed by a further 2.5% transfer until the reserve equals the full stated capital. The directive defines stated capital according to the Companies Act and establishes the legal framework for capital adequacy within the microfinance sector.

Sri LankaCentral Bank of Sri Lanka

MONETARY BOARD

CENTRAL BANK OF SRI LANKA

27 October, 2016
MICROFINANCE ACT DIRECTIONS
NO. 02 OF 2016

STATUTORY RESERVE

Issued under Section 11 of the Microfinance Act, No. 6 of 2016.

1. Statutory Reserve

1.1. Every Licensed Microfinance Company (LMFC) shall maintain a statutory reserve and shall, out of the net profits after the payment of tax of each year, before any dividend is declared, transfer to such reserve fund—

a) a sum equivalent to not less than Five percent (5%) of such profits until the amount of the said statutory reserve is equal to fifty percent (50%) of the stated capital of such LMFC; and

b) a further sum equivalent to not less than Two point Five percent (2.5%) of such profits until the amount of the said statutory reserve is equal to the stated capital of such LMFC.

2. Interpretation

2.1. Stated capital in relation to a company means the total of all amounts received by the company or due and payable to the company — a) in respect of the issue of shares; and b) in respect of calls on shares, as contained in the definition in the Section 58 of the Companies Act, No. 07 of 2007.

Indrajit Coomaraswamy
Chairman of the Monetary Board
Governor of the Central Bank of Sri Lanka

Note from RegAlert. AI assistants can read this document in full, and search 70,000+ more, through the RegAlert MCP connector (https://mcp.regalert.today/mcp). Free with an account. How to connect ChatGPT, Claude or Cursor.

Lineage: No known changes

RegAlert holds no document that amends or replaces this one. This is not a check that it is in force: confirm with the regulator.

Act No. 6 of 2016Not in RegAlertAct No. 6 of 2016 — Not in RegAlertCentral Bank of Sri LankaMicrofinance Act Directions N…2016-10-27 · this documentCentral Bank of Sri Lanka Microfinance Act Directions No. 02 of 2016 on Statutory Reserve (2016-10-27)
amendssupersedesissued underrefers todashed card: not in RegAlert (or proposed)arrows run from the older text to the one that changes it
The links and the sentences they come from (1)
Issued under
  • Act No. 6 of 2016Not in RegAlert

    “Issued under Section 11 of the Microfinance Act, No. 6 of 2016.”

Similar documents from other regulators

More like this from CBSL

We email you every new CBSL publication the day it's published.

Source: Central Bank of Sri Lanka — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works

In RegAlert: added · updated