(1) Subject to subsection (2) every licensed financial institution shall maintain a reserve fund and shall, out of its net profits of each year transfer to that fund a sum equal to not less than 20% of profits whenever the amount of the reserve fund is less than a 100% of the paid-up or, or as the case may be, assigned capital of the licensed financial institution.
(2) No licensed financial institution or licensed financial holding company shall declare, credit or pay any dividend or make any other transfer from profits whenever the declaration, credit, payment or transfer —
(a) would result in an impairment of the capital required under section 44; or
(b) if the licensed financial institution or licensed financial holding company realises a net loss for that financial year.