Malaysia Guidelines on Statutory Reserve Requirement – An Overview and Summary of Requirements

• By: Staff Editor
• Date: May 20, 2013

The Statutory Reserve Requirement (SRR) is a monetary policy instrument available to Bank Negara Malaysia (BNM) for purposes of liquidity management. Banking institutions namely commercial banks, merchant/investment banks and Islamic banks should maintain balances in their Statutory Reserve Accounts (SRA) equivalent to a certain proportion of their eligible liabilities (EL), this proportion is called the SRR rate. The SRR is used to withdraw or inject liquidity when the excess or lack of liquidity in the banking system is perceived by the Bank to be large and long-term in nature. This requirement applies to commercial banks, merchant/investment banks and Islamic banks.