2019 US Virgin Islands Code
Title 9 - Banking
Chapter 3 - Organization and Management of Banks
§ 35. Amount of capital stock

Rights and liabilities of stockholders and creditors

• (a) No bank shall be organized and established in the United States Virgin Islands with a subscribed capital less than $500,000. The capital stock of each bank shall be divided into shares of $100 each, or into such shares of lesser amount as may be provided in the articles of incorporation, and shall be transferable on the books of the bank in such manner as may be prescribed in its bylaws or articles of incorporation. Every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all rights and liabilities of the prior holder of such shares; and no change shall be made in the articles of incorporation by which the rights or security of the existing creditors of the bank shall be impaired.

Amount of stock to be paid in

• (b) At least 50 per centum, but in no case less than $500,000, of its subscribed capital stock shall be paid in before it shall be authorized to commence business; and the remainder shall be paid in monthly installments of at least 10 per centum each, on the whole amount of the subscribed capital stock from the time the bank is authorized by the Banking Board to commence business. The payment of each installment shall be certified to the Banking Board, under oath, by the president or the manager of the bank.

Delinquent stockholders

• (c) Any shareholder or assignee thereof who fails to pay any installment as required by subsection (b) of this section, shall be deemed to be a delinquent shareholder, and the directors of the bank may sell the share or shares of such delinquent stockholders at a public auction after announcing the sale in a newspaper of general circulation in each judicial division of the United States Virgin Islands. The stock so sold shall be awarded to the person paying the highest price therefor, such price not to be less than the amount due on the stock plus the expense of announcement and sale. The excess, if any, shall be paid to delinquent stockholder. If there is no bidder who will pay for such stock the amount due thereon to the bank and the cost of advertisement and sale, the amount previously paid shall be forfeited to the bank, and such stock shall be sold as the directors may order, within six months from the time of such forfeiture, and if not sold it shall be canceled and deducted from the capital stock of the bank. If any such cancellation and reduction shall reduce the capital of the bank below the minimum of the capital required by law, the capital stock shall, within thirty days from the date of such cancellation, be increased to the required amount, in default of which a receiver shall be appointed according to the provisions of this title to liquidate the business of the bank.

Deficiency in stock; receivership

• (d) Every bank established after June 16, 1949, which fails to have its capital stock paid in as required by this section shall, within three months after receiving notice thereof from the Banking Board cover the deficiency in its capital stock by pro rata assessment on the shareholders, or by means of new shareholders. If any bank fails to have its capital stock paid in and refuses to go into liquidation as provided by this title, after receiving notice from the Banking Board, a receiver shall be appointed to liquidate the business of the bank according to the provisions of this title.

  No bank shall make a new issue of stock until all stock previously issued shall have been paid in.

Payment of stock

• (e) If the interest of a bank requires a prompt payment of its shares, the Board of Directors may resolve to call for such immediate payment of an assessment on the stock as may be necessary, and shall report the fact to the stockholders at their next general meeting, whether regular or special.

Dividends, distributions and withdrawals

• (f)

  • (1) Limitation. A financial institution organized pursuant to this chapter may not authorize dividends, distributions or withdrawals that reduce capital below the amount required by this title.

  • (2) Form. Dividends, distributions and withdrawals must be in cash or in additional shares, members' interests or partnership interests unless otherwise authorized by the Director or Banking Board.

Cash reserves

• (g)

  • (1) A financial institution organized under the laws of this Territory shall maintain reserves on deposits or accounts as required from time to time by the Federal Reserve Act, Section 12 U.S.C. 247, as amended and any regulations promulgated under it.

  • (2) Transition period. Reserves held by a financial institution to meet the requirements of this section must be in the form prescribed by the Federal Reserve Act, Section 12 U.S.C. 248 as amended, and any regulations promulgated under it.

  • (3) Assessment for deficiency. Any deficiency in the cash reserve established pursuant to this section may be subject to an assessment for such period of time as the deficiency may exceed 2% of the required reserves. Any such penalty may be assessed at a rate not to exceed 10% per year.

  • (4) Failure to make up deficiency. If any financial institution fails to make up a reserve deficiency with a corresponding excess reserve in the reserve computation period immediately following the period in which the deficiency occurred, the Banking Board may declare that no loans or investments be made except those loans secured by deposit accounts or investments made in bonds or other obligations issued by the United States or any of its instrumentalities.

  • (5) Reports. The Banking Board may require any financial institution to furnish such reports as it deems appropriate to properly supervise compliance with the requirements of this section.