Additional capital requirements

(1) In addition to the capital requirements of sections 16 and 17 of this Act, the Central Bank may also require every local licensee to maintain capital in amounts not less than such percentage of that licensee’s total assets and off-balance sheet contingencies, commitments, transactions and exposures, 23 calculated in such a manner and using such methods as the Central Bank may prescribe. (1A) The Central Bank may also at any time direct a particular licensee to maintain a higher percentage of capital in excess of the minimum specified above if it considers such higher percentage appropriate having regard to the financial condition of such licensee. (2) For purposes of this section, fully paid-up and unimpaired capital and reserves, mean– (a) allotted, called up and fully paid and outstanding share capital, 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 shares; (c) any other disclosed reserves created or increased by appropriations or retained earnings; (d) current retained earnings; (e) subordinated term debt subject to such terms, limits and restrictions as the Central Bank may from time to time specify; (f) 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 24 included in capital under such terms and conditions as the Central Bank may specify; and (g) current year’s losses as reported to the Central Bank irrespective of whether they have been published, and any accumulated losses not previously published. (3) Whether 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 base of the licensee for purposes of computing the minimum requirements provided in this section. (4) Any bank which on and from the 5th October, 2002 does not comply with the requirements of this section shall, within six months of the said date, or such longer period as may be approved in writing by the Central Bank, maintain fully paid-up and unimpaired capital and reserves, as specified in this section. (5) The Central Bank may require any or every licensee to comply with such minimum standards of prudent conduct of business as it may by Order prescribe, including, but not limited to, standards relating to liquidity, concentration of risk and provisions against non-performing and doubtful assets.