Regulatory Alerts1995-01-01
Banking and Financial Services (Reserve Account) Regulations 1995
Issued by the Government of Zambia under the Banking and Financial Services Act, these regulations mandate all licensed banks and financial institutions to maintain a mandatory reserve fund derived from actual earnings, recoveries, or capital asset realizations. Institutions must transfer at least fifty percent of their current financial year distributable retained earnings to this fund before declaring any dividends whenever the reserve fund remains at or below half of their paid-up equity capital. When the reserve fund exceeds half but falls short of the paid-up equity capital, institutions must instead transfer twenty percent of profits or a sufficient amount to fully match their paid-up equity capital.
10th November, 1995 Statutory Instruments 613 GOVERNMENT OF ZAMBIA STATUTORY INSTRUMENT No. 182 of 1995 The Banking and Financial Services Act (Act No. 21 of 1994) The Banking and Financial Services (Reserve Account) Regulations, 1995 In EXERCISE of the powers contained in section sixty-nine and one hundred and twenty-four of the Banking and Financial Services Act, 1994, and on the recommendation of the Bank of Zambia, the following Regulations are hereby made:
- These Regulations may be cited as the Banking and Financial Services (Reserve Account) Regulations, 1995. Title
- In these Regulations, unless the context otherwise requires- "reserve fund" means a fund of a bank or financial institution generated from actual earnings or by way of recoveries, or a surplus on the realization of the scale of capital assets, but does not include any surplus resulting from a revaluation of assets. Interpretation
- A bank or financial institution shall maintain a reserve fund and shall, out of its retained earnings of distributable profits from the current financial year, before any dividend is declared, transfer to that fund a sum equal to not less than- (a) fifty per centum of such profits, whenever the amount of the reserve fund does not exceed half of its paid-up equity capital; or (b) twenty per centum of such profits or such sum as shall make the amount of the reserve fund equal to the paid-up equity capital, whenever the amount of the reserve fund exceeds half of its paid-up equity capital, but is less than the paid-up equity capital. Transfers to a reserve fund LUSAKA R. D. S. PENZA 6th November 1995 Minister of Finance [MF.101/16] Copies of this Statutory Instrument can be obtained from the Government Printer, P.O. Box 30136, 10101, Lusaka. Price K45.00 each.