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Co-Operative Societies Act 2008

119. Reserve Fund liquidity reserve, and adequacy of capital

1.      Where a society realises a surplus from its transactions that society shall establish and maintain a Reserve Fund.

2.      Where the annual audit of a society indicates a net surplus, at least 20 percent of that surplus, shall be credited to the 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.

3.      Every society shall ensure that its statutory and other reserves are, at no stage, less than 10 ten percent of its total liabilities.

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

5.      Subsection (3) applies to credit unions only.

Cooperative Societies Act, 2008 Back

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