Directives

Directive No. SBB/4/95 LEGAL RESERVE

LICENSING AND SUPERVISION OF BANKING BUSINESS -Ethiopian National Bank Directives

Directive No. SBB/4/95 LEGAL RESERVE

1. Issuing Authority

These directives are issued by the National Bank of Ethiopia pursuant to the

authority vested in it by Article 41 of the Monetary and Banking Proclamation

No. 83/1994 and by article 13(4) of the Licensing and Supervision of Banking

Business Proclamation No. 84/1994.

2. Requirement

2.1 Every bank shall transfer annually 25% of its annual net profit to its

Legal Reserve Account until such account equals its capital.

2.2 When the legal reserve account equals the capital of the bank, the

amount to be transferred to the legal reserve account shall be 10% (ten percent) of the annual net profit.

These Directives shall enter into force as of 21st day of August 1995.

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