Revised Laws of Saint Lucia (2021)

119.   Reserve Fund, liquidity and adequacy of capital

  1.  

    (1)   Where a society realises a net surplus from its transactions that society shall establish and maintain a reserve fund which shall be kept in liquid form to the satisfaction of the Registrar.

  1.  

    (2)   Where the annual audit of a society indicates a net surplus, at least 20% of that surplus, shall be credited to the statutory reserve fund; and such reserve fund may, subject to the approval of the Registrar, be used in the business of the society, including unforeseen losses, unexpected shortfalls in liquid cash, capital retention, repair and maintenance and the avoidance of external borrowing.

  1.  

    (3)   Every society shall ensure—

    1.  

      (a)     that not less than 15% of its members' shares and deposits are kept in a liquidity reserve; and

    1.  

      (b)     that its statutory and other reserves are, at no stage, less than 10% of its total liabilities.

  1.  

    (4)   The Registrar shall, on the application of a society or on his or her own account, grant a period of time as considered reasonable to enable management to make good any deficiency in the adequacy of its capital base.

  1.  

    (5)   Subsections (1) and (3) apply to credit unions only.