Enforcement Rules of Credit Cooperatives Act Article 5

The use of surplus reserves as stated by a credit cooperative in its articles of incorporation pursuant to Subparagraph 15, Paragraph 1, Article 8 of the Act shall conform to the following:1. The legal surplus reserve, capital reserve, and special surplus reserve shall be used only for the purpose of offsetting loss. The preceding provision does not apply to the use of special surplus reserve that is set aside according to a capital expenditure plan for long-term development and has obtained the approval of the county (city) government or the Department of Finance of municipal government.2. Unless the surplus reserve is insufficient to offset loss, capital reserve shall not be used to offset loss.