Capital requirements

(1) Every licensee under this Act shall at all times maintain fully paid-up capital as follows– (a) in the case of a local bank, fully paid-up capital, of not less than the equivalent of ten million dollars; (b) in the case of a foreign bank– (i) total worldwide fully paid-up capital, of not less than the equivalent of one hundred million dollars; and (ii) assigned capital, of not less than the equivalent of ten million dollars; (c) in the case of a local financial institution, fully paid-up capital, of not less than the equivalent of five hundred thousand dollars; or (d) in the case of a foreign financial institution– (i) total worldwide fully paid-up capital, of not less than the equivalent of fifty million dollars; and (ii) assigned capital, of not less than the equivalent of five hundred thousand dollars. 81 (2) The Central Bank may also require every licensee to maintain fully paid-up capital or assigned capital and reserves, as the case may be, in amounts not less than that percentage of the licensee’s total assets, contingencies, off-balance sheet commitments, transactions and accounts as the Central Bank may specify, calculated in such a manner and using such methods as the Central Bank may prescribe and taking into account on a consistent basis the types of business which the licensee conducts, types of assets which the licensee holds and such other factors as the Central Bank deems necessary, provided that the powers conferred on the Central Bank by this sub-section shall be exercised after consultation with the Minister. (3) For purposes of this section, fully paid-up capital and reserves or assigned capital and reserves mean– (a) allotted, called up and fully paid and outstanding share capital or assigned capital, as the case may be, including any amounts which may be paid in excess of the par or stated value of the shares; (b) perpetual, irredeemable non-cumulative preferred shares, including shares convertible at the issuing licensee’s option into common (c) the statutory reserve fund maintained under section 38 of this Act; (d) any other disclosed reserves created or increased by appropriations of retained earnings; (e) retained earnings; 82 (f) subordinated term debt subject to such terms, limits and restrictions as the Central Bank may from time to time specify; and (g) any other capital element or portion thereof as the Central Bank may declare by notice in the Gazette to be eligible for inclusion under this section for purposes of computing the required minimum proportions; less– (h) goodwill and any other intangible assets, except such intangible assets which are readily marketable and have identifiable and consistent streams of cash flows which, in the determination of the Central Bank, may be included in capital under such terms and conditions as the Central Bank may specify; and (i) current year’s losses as reported to the Central Bank irrespective of whether they have been published, and any accumulated losses not previously published. (4) In-kind capital shall not be included as capital and reserves of a licensee. (5) Where any reserves or portion of any reserves have been created against identified assets, groups of assets or losses or, in respect of a deterioration in the value of particular assets of the licensee, such reserves or portion of reserves will be considered as being impaired and shall not be included in the capital of the licensee for purposes of computing the minimum requirements provided in this section. 83 (6) Any licensee which at the commencement of this Act, does not comply with the requirements of this section shall, within twelve months after the commencement of this Act or such longer period as may be approved in writing by the Central Bank, maintain fully paid up or assigned capital, as the case may be, as specified. (7) Any licensee which fails to comply with any of the provisions of this section shall, on being called upon in writing by the Central Bank, pay a fine not exceeding one hundred thousand dollars and ten thousand dollars for each day of such failure to comply.