Reserve Bank of India Act, 1934

Section - 42 - Cash reserves of scheduled banks to be kept with the Bank

Cash reserves of scheduled banks to be kept with the Bank.

42. [(1) Every bank included in the Second Schedule shall maintain with the Bank an average daily balance the amount of which shall not be less than [such per cent of the total of the demand and time liabilities in India of such bank as shown in the return referred to in sub-section (2), as the Bank may from time to time, having regard to the needs of securing the monetary stability in the country, notify in the Gazette of India].

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Explanation.-For the purposes of this section,-

(a)	-	"average daily balance" shall mean the average of the balances held at the close of business of each day of a [fortnight];
[(b)	-	"fortnight" means the period from the first day to the fifteenth day of each calendar month or sixteenth day to the last day of each calendar month, both days inclusive;]
[(c)	-	"liabilities" shall not include-