(1) The Institution shall establish a reserve fund to which may be transferred such sums as the Board may deem fit out of the annual profits accruing to the Institution:
     Provided that the sums to be transferred under this sub-section shall not be less than twenty per cent. of the annual profits accruing to the Institution.
     (2) After making provisions for bad and doubtful debts, depreciation of assets and for all other matters for which provision is necessary or expedient or which is usually provided for by bankers and for the reserve fund referred to in sub-section (1), and after transferring a part of the profit to such other reserves or funds as may be considered appropriate, the Board may out of its net profits propose a dividend.