Page 162 - Week 01 - Tuesday, 12 February 1991
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Minimum asset/loan ratios
A building society shall not, at any time, have less than 50 per cent of its assets invested in loans secured by mortgage over freehold or leasehold land that is used or that is intended to be used for residential purposes.
In respect of a financial year a society shall advance not less than 60 per cent of its loans for residential purposes.
Requirements for credit unions:
Liquidity
A registered credit society shall not approve of a loan unless, at the time the approval is given, the society holds liquid funds equal to or not less than 10 per cent of the withdrawable funds of the society.
Requirements for building societies and credit unions:
Building societies and credit societies are required to create a reserve fund, known as the Statutory Reserve, out of surplus arising in the financial year. Minimum transfer is three tenths of one per cent of the societies withdrawable funds until the reserve reaches two and one half per cent of withdrawable funds.
(2) Comparison of ACT requirements with other States and Northern Territory:
Building Societies
Capital Adequacy
New South Wales and ACT - identicalrequirements (based on Reserve Bank Model).
Queensland - no similar requirements.
Northern Territory - minimum amount no less than 3 per cent of assets.
South Australia - no similar requirement. Legislation being introduced similar to NSWand ACT.
Western Australia - 5 per cent of aggregate loan assets for the financial year.
Victoria and Tasmania - no similar requirements.
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