Clause 70

Every society which derives a surplus from its transactions shall maintain a reserve fund which shall be used to cover losses incurred by the society and shown in the audited balance-sheet.

The reserve fund shall be kept in the form of liquid assets.

Every society shall pay into the reserve fund at least twenty per cent of the surplus resulting from the operations of the society during the financial year, provided that when the reserve fund has reached an amount that is equal to ten per cent of its paid up share capital or subscription capital, such society may carry five per cent of its surplus to the reserve fund.

The reserve fund shall be indivisible and no member shall be entitled to claim a specific share of it.

The requirement of this section in relation to the maintenance of a reserve fund by a society shall not apply to a society that is required to maintain a reserve fund, or any fund by whatever name called having a purpose similar to a reserve fund pursuant to the provision of the Banking Act (Cap. 182), the Insurance Act or any other written law.