Section 18 of BRA : Section 18: Cash Reserve

BRA

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Explanation using Example

Imagine a local bank in India, "XYZ Community Bank," which is not a scheduled bank. As per Section 18 of the Banking Regulation Act, 1949, XYZ Community Bank is required to maintain a certain percentage of its demand and time liabilities as a cash reserve. This percentage is determined by the Reserve Bank of India (RBI) and is meant to ensure monetary stability in the country.

For example, if the RBI specifies that banks must maintain a 4% cash reserve ratio, and on the last Friday of the second preceding fortnight XYZ Community Bank had demand and time liabilities totaling ₹100 crore, it would need to maintain ...

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