57. Maintenance of specified assets
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(1) Every licensed financial institution may be required to maintain specified assets of an amount not less than that from time to time determined by the Central Bank.
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(2) The amount of the specified assets under subsection (1) shall be expressed as a percentage of the aggregate demand, savings, and time deposits and other liabilities of the licensed financial institution and the percentage shall not be more than 40% unless the Central Bank so approves.
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(3) The Central Bank may approve a period during which surpluses and deficiencies in specified assets may be averaged.
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(4) The Central Bank may provide that advances granted to a licensed financial institution by any other financial institution or by an overseas branch or office may be excluded from the computation of the demand, savings and time deposits and other liabilities of the licensed financial institution.
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(5) The Central Bank may determine the distribution of amounts required to be held between different classes of specified assets, and may also differentiate between classes of banks, credit institutions and other financial institutions.
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(6) Every licensed financial institution which is required to hold specified assets shall be afforded a reasonable time to comply.
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(7) In this section “specified assets” means freely transferable assets free from any charge, lien or encumbrance and includes —
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(a) notes and coins which are legal tender in Saint Lucia and such foreign notes and coins as the Central Bank may specify;
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(b) balances at the Central Bank;
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© net balances at licensed financial institutions in Saint Lucia but where the balances are negative they will be subtracted from the specified assets;
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(d) treasury bills and other securities issued or guaranteed by a Participating Government and securities issued by a statutory corporation wholly owned by a Participating Government and approved by the Central Bank;
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© bills of exchange and promissory notes eligible for rediscount by the Central Bank and warehouse warrants or their equivalent securing possession of goods against which the Central Bank may grant advances, within the limits and in accordance with the evaluation fixed by the Central Bank;
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(f) net balances at licensed financial institutions in the monetary areas as the Central Bank may approve and the Central Bank may provide for the treatment to be accorded the balance or any portion in respect of the head office of a licensed financial institution organised abroad, and where any balances are negative they will be subtracted from specified assets;
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(g) money at call in monetary areas approved by the Central Bank under paragraph (f), bills of exchange bearing at least two good signatures drawn on and payable at any place in the approved monetary areas, and treasury bills issued by the government of a country in any approved monetary areas and maturing within 180 days.
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(8) Where a licensed financial institution —
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(a) fails to furnish promptly any information required by the Central Bank to satisfy itself that the licensed financial institution is observing the requirements of this section; or
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(b) allows its holdings of specified assets to be less than the amount which is fixed from time to time; or
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© during the period of any deficiency of specified assets the licensed financial institution grants or permits increases in its outstanding advances, whether by loans or overdrafts or investment portfolio other than investment in specified assets,
it is liable to pay a penalty at an annual rate of 11.5% on the amount of the deficiency for so long as the failure continues, and the penalty shall be payable to the Central Bank on the date as may be fixed by the Central Bank and may be recovered by deduction from any balance of the licensed financial institution with the Central Bank.