FEDERAL RESERVE Act
equal to not less than seven per centum of the aggregate amount of its demand deposits
and three per centum of its time deposits.
(b) If in a reserve city, as now or hereafter defined, it shall hold and maintain with
the Federal reserve bank of its district an actual net balance equal to not less than ten
per centum of the aggregate amount of its demand deposits and three per centum of
its time deposits: Provided, however, That if located in the outlying districts of a reserve
city or in territory added to such a city by the extension of its corporate charter, it
may, upon the affirmative vote of five members of the Federal Reserve Board, hold and
maintain the reserve balances specified in paragraph (a) hereof.
(¢) If in a central reserve city, as now or hereafter defined, it shall hold and main-
tain with the Federal reserve bank of its district an actual net balance equal to not less
than thirteen per centum of the aggregate amount of its demand deposits and three
per centum of its time deposits: Provided, however, That if located in the outlying
districts of a central reserve city or in territory added to such city by the extension of
its corporate charter, it may, upon the affirmative vote of five members of the Federal
Reserve Board, hold and maintain the reserve balances specified in paragraphs (a)
or (b) thereof.
No member bank shall keep on deposit with any State bank or trust company which
is not a member bank a sum in excess of ten per centum of its own paid-up capital and
surplus. No member bank shall act as the medium or agent of a nonmember bank in
applying for or receiving discounts from a Federal reserve bank under the provisions
of this Act, except by permission of the Federal Reserve Board.
The required balance carried by a member bank with a Federal reserve bank may,
under the regulations and subject to such penalties as may be prescribed by the Federal
Reserve Board, be checked against and withdrawn by such member bank for the pur-
pose of meeting existing liabilities: Provided, however, That no bank shall at any time
make new loans or shall pay any dividends unless and until the total balance required
by law is fully restored.
In estimating the balances required by this Act, the net difference of amounts due
to and from other banks shall be taken as the basis for ascertaining the deposits against
which required balances with Federal reserve banks shall be determined.
National banks, or banks organized under local laws, located in Alaska or in a de-
pendency or insular possession or any part of the United States outside the continental
United States may remain nonmember banks, and shall in that event maintain reserves
and comply with all the conditions now provided by law regulating them; or said
banks may, with the consent of the Reserve Board, become member banks of any one
of the reserve districts, and shall in that event take stock, maintain reserves, and be
subject to all the other provisions of this Act.
Sec. 20. So much of sections two and three of the Act of June twentieth, eighteen
hundred and seventy-four, entitled “An Act fixing the amount of United States notes,
providing for a redistribution of the national-bank currency, and for other purposes.”
as provides that the fund deposited by any national banking association with the
Treasurer of the United States for the redemption of its notes shall be counted as a part
of its lawful reserve as provided in the Act aforesaid, is hereby repealed. And from
and after the passage of this Act such fund of five per centum shall in no case be counted
by any national banking association as a part of its lawful reserve.
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