Directive No. SBB/4/95 Legal Reserve

Every bank must transfer 25% of its annual net profit to its Legal Reserve Account until the account balance equals the bank's capital. Once the legal reserve account equals the capital, the required transfer amount decreases to 10% of the annual net profit. These directives entered into force on August 21, 1995.

Get NBE alerts — same-day email on every new publication.

LICENSING AND SUPERVISION OF
BANKING BUSINESS
Directive No. SBB/4/95
LEGAL RESERVE

Issuing Authority
These directives are issued by the National Bank of Ethiopia pursuant to the authority vested in it by Article 41 of the Monetary and Banking Proclamation No. 83/1994 and by article 13(4) of the Licensing and Supervision of Banking Business Proclamation No. 84/1994.
Requirement
2.1 Every bank shall transfer annually 25% of its annual net profit to its
13
Legal Reserve Account until such account equals its capital.
2.2 When the legal reserve account equals the capital of the bank, the
amount to be transferred to the legal reserve account shall be 10% (ten percent) of the annual net profit. These Directives shall enter into force as of 21st day of August 1995.

Lineage: In force

amendssupersedesissued underrefers toproposed or not in RegAlertarrows run from the older text to the one that changes it

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