(1)Every banking company, not being a scheduled bank, [shall maintain in India on a daily basis] by way of cash reserve with itself or by way of balance in a current account with the Reserve Bank, or by way of net balance in current accounts or in one or more of the aforesaid ways, a sum equivalent to at least [such per cent.] [Substituted for the words "at least three per cent." by Act No. 4 OF 2013] of the total of its demand and time liabilities in India as on the last Friday of the second preceding fortnight [as the Reserve Bank may specify, by notification in the Official Gazette, from time to time, having regard to the needs of securing the monetary stability in the country] [Inserted by Act No. 4 OF 2013] and shall submit to the Reserve Bank before the twentieth day of every month a return showing the amount so held on alternate Fridays during a month with particulars of its demand and time liabilities in India on such Fridays or if any such Friday is a public holiday under the Negotiable Instruments Act, 1881 (26 of 1881), at the close of business on the preceding working day.Explanation. - In this section, and in section 24,-(a)"liabilities in India" shall not include-(i)the paid-up capital or the reserves or any credit balance in the profit and loss account of the banking company;(ii)any advance taken from the Reserve Bank [***] [Wrods "or from the Development Bank" ommtted by Act No. 4 OF 2013] or from the Exim Bank [or from the Reconstruction Bank] [Inserted by Act 62 of 1984, Section 71 and Sch. III (w.e.f. 20.3.1985).] [or from the National Housing Bank] [Inserted by Act 53 of 1987, Section 56 and Sch. II (w.e.f. 9.7.1988).] or from the National Bank [, or from the Small Industries Bank] [ Inserted by Act 39 of 1989, Section 53 and Sch. II (w.e.f. 7.3.1990).] by the banking company;(iii)in the case of a Regional Rural Bank, also any loan taken by such bank from its Sponsor Bank;(b)"fortnight" shall mean the period from Saturday to the second following Friday, both days inclusive;(c)"net balance in current accounts" shall, in relation to a banking company, mean the excess, if any, of the aggregate of the credit balances in current account maintained by that banking company with the State Bank of India or a subsidiary bank or a corresponding new bank over the aggregate of the credit balances in current account held by the said banks with such banking company;(d)for the purposes of computation of liabilities, the aggregate of the liabilities of a banking company to the State Bank of India, a subsidiary bank, a corresponding new bank, a regional rural bank, another banking company, a co-operative bank or any other financial institution notified by the Central Government in this behalf, shall be reduced by the aggregate of the liabilities of all such banks and institutions to the banking company;(e)the expression "co-operative bank" shall have the meaning assigned to it in clause (cci) of section 56.
