Application of section 16 of Domestic Banks and Financial Institutions Act

(1) The Bank may vary the proportion which the average minimum balance required to be held under section 13 of the Domestic Banks and Financial Institutions Act by every bank or financial institution on an account with the Bank shall bear to the deposit liabilities of such bank or financial institution, provided that such proportion shall not be more than twenty per cent. (2) Subject to the limit specified in sub-section (1), the Bank may prescribe different proportions for different types of liabilities and may further prescribe the method of computing the required balances. (3) Any increase in the proportion prescribed under sub- (a) shall be effected so as not to exceed two percentage points in any period of thirty days; and (b) shall not be required without at least thirty days’ notice to the banks or financial institutions concerned. (4) The Bank may require that the proportion to be applied to a financial institution which is a bank shall differ from the proportion to be applied to a financial institution which is not a bank provided that the same proportion shall be applied to every bank and every member of the same category of financial