The Registrar of Credit unions issued a Draft Regulatory Reserve Ratio for Credit Unions in April 2009. It is planned that the Regulatory Reserve Ratio will come into effect from 30th September 2009.
Once the draft paper is finalised all credit unions will be required to maintain a Regulatory Reserve Ratio of not less than 10 per cent on an on-going basis. The Regulatory Reserve Ratio is defined in the section 1 of the paper.
The board of directors of each credit union is responsible for achieving and maintaining the Regulatory Reserve Ratio. Where a credit union's Regulatory Reserve Ratio is less than 10 per cent, the credit union in the first instance must transfer other realised reserves to the statutory reserve in order to bring the Regulatory Reserve Ratio up to the required minimum. The timeframe for implementation is set out in Section 2 of the paper.