Section 46, The Bank of Sierra Leone Act, 2000

(1) The Bank may, from time to time, prescribe by statutory instrument and by written notice to each licensed institution the maintenance of required reserves, against deposit and other similar liabilities which may be specified for this purpose; and such reserves shall be maintained by way of cash holding with each licensed institution or by way of balance held in the current account with the Bank or both on a periodic average basis in such proportion and over such period as the Bank may prescribe. (2) The Bank may prescribe by statutory instrument different reserve ratios for different classes of deposit and other similar liabilities and the method of their computation. (3) The reserve ratios shall be uniform for all licensed institutions. (4) Any prescription of, or increase in, the required reserve ratios shall be effective only after reasonable notice has been communicated to the licensed institutions. (5) Reserves held by way of balances in the current account with the Bank may, under such regulations and subject to such charges as may be prescribed by the Bank, be withdrawn by licensed institutions for the purpose of meeting their existing liabilities and may further serve as a basis for the clearance of cheques and settlement of balances among licensed institutions. (6) Every licensed institution shall send to the Bank returns signed by two responsible officers of the licensed institution concerned considered necessary for carrying out the purposes of this section at such periods of time as the Bank may from time to time direct. (7) The Bank shall impose on any licensed institution which fails to maintain the required reserves in the appropriate ratio prescribed under this section a penal interest at a rate of 5% above the institution's maximum lending rate for so long as the deficiency continues; and such interest charge shall be payable to the Bank on demand made by it within such date as may be determined by the Bank. (8) Penal interest may be recovered by deduction from any balance in the account of the licensed institution maintained with the Bank. No. [illegible] Bank of Sierra Leone Act 2000 55 (9) The Bank may pay interest at such rate as it thinks fit, on deposits held under this section and such interest payment shall only be limited to the minimum amount required and shall not exceed the minimum deposit required to be maintained by a licensed institution. [Margin: Bank to limit credit expansion.]