Regulations Governing the Capital Adequacy Ratio and Capital Grade of Credit Cooperatives Article 3

The phrase “A credit cooperative’s equity capital to its risk assets (i.e. capital adequacy ratio) shall not be less than a certain ratio”stipulated in Article 37 of the Act to which Paragraph 1, Article 44 of the Banking Act applies mutatis mutandis shall mean that the capital adequacy ratio of a credit cooperative shall not be less than 8 percent. The term “capital grade” as used in Article 37 of the Act to which Paragraph 2, Article 44 of the Banking Act applies mutatis mutandis is delineated according to the standards set forth below: 1.“Adequate capital” means the capital adequacy ratio is 8 percent or higher. 2.“Inadequate capital” means the capital adequacy ratio is 6 percent or higher but below 8 percent. 3.“Significantly inadequate capital” means the capital adequacy ratio is 2 percent or higher but below 6 percent. 4.“Seriously inadequate capital” means the capital adequacy ratio is less than 2 percent. A credit cooperative whose net-worth to total assets is less than 2 percent shall be deemed as having seriously inadequate capital.