(1)After the expiry of two years from the commencement of this Act, every banking company shall maintain in cash, gold or unencumbered approved securities, valued at a price not exceeding the current market price, an amount which shall not at the close of business on any day be less than 20 per cent.of the total of its time and demand liabilities {Subs.by Act 20 of 1950, s.3, for ” in the States “} [in India].Explanation.—For the purposes of this section liabilities shall not include the paid-up capital or the reserves or any credit balance in the profit and loss account of the company or the amount of any loan taken from the Reserve Bank.(2)In computing the amount for the purposes of sub-section (l) the deposit required under the proviso to sub-section (2) of section 11 to be made with the Reserve Bank by a banking company incorporated {Subs., ibid., for “elsewhere than in a State”} [outside India] and any balance maintained by a banking company with the Reserve Bank or its agent or both, including in the case of a scheduled bank the balance required under sub-section (1) of section 42 of the Reserve Bank of India Act, 1934, to be so maintained, shall be deemed to be cash maintained.(3)For the purpose of ensuring compliance with the provisions of thls section, every banking company shall, not later than fifteen days after the end of the month to which it relates, furnish to the Reserve Bank in the prescribed form and manner a monthly return showing particulars of its assets maintained in accordance with this section, and its time and demand liabilities at the close of business on each Friday during the month, or if any Friday is a public holiday under the NegotiabIe Instruments Act, 1881, at the close of business on the preceding working day.
