Section 31, The Banking Act, 2019

(1) Subject to subsection (2) of section 30, a bank shallnot declare or pay an interim or final dividend on its shares until it has- (a) completely written-off all its capitalised expenditure; (b) made the required provisions for nonperforming loans and other deterioration in asset value; and (c) satisfied the minimum capital adequacy ratio requirements and any other capital ratios specified by the Central Bank. (2) Where the payment of any interim or final dividend would result in withdrawal of any part of the general reserves due to inadequacy of the profit for the year or where the statutory report of the auditors on the annual accounts of the bank is not satisfactory, the bank shall obtain prior written approval of the Central Bank before it declares any dividend on its shares. (3) A bank shall not pay a dividend and bonus on its shares without the prior approval of the Central Bank. (4) Where a bank declares or pays any interim or final dividend in contravention of this section, every director of the Board of the bank is liable to an administrative penalty. (5) A director of the bank shall not be liable to pay the penalty if he proves that the contravention was committed without his consent or connivance or that he exercised all due diligence to prevent the contravention having regard to all the circumstances. 52 53 Capital adequacy on consolidated basis. Statutory reserve fund. on declaration and payment of dividend. Additional capital PART VI - LIQUIDITY