Montana Code 32-1-455. Reserve requirements
32-1-455. Reserve requirements. (1) A bank, except a reserve bank, shall maintain at all times a reserve of that percentage of its deposit liabilities as required by the appropriate federal regulator.
Terms Used In Montana Code 32-1-455
- bank: as used in this chapter means any corporation that has been incorporated to conduct the business of receiving money on deposit or transacting a trust or investment business, as defined in this chapter. See Montana Code 32-1-102
- Department: means the department of administration provided for in Title 2, chapter 15, part 10. See Montana Code 32-1-109
- Doing business in this state: means located in this state or having a physical branch bank location in this state. See Montana Code 32-1-109
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
- Surplus: means a fund paid in or created under this chapter by a bank from its net earnings or undivided profits that, when set apart and designated as surplus, is not available for the payment of dividends and cannot be used for the payment of expenses or losses so long as the bank has undivided profits. See Montana Code 32-1-109
(2)The department may establish reserve requirements if the federal regulator discontinues reserve requirements.
(3)A bank approved by the department as a reserve bank shall maintain at all times a reserve as the department requires by rule.
(4)A solvent bank of good repute having a full paid-up capital and surplus as the department requires by rule and doing business in this state or any other state may be designated by the department as a reserve agent for Montana banking institutions. The approval or designation may be withdrawn or withheld at any time by the department for cause.
(5)A bank whose reserve drops below the legal requirements shall report the matter to the department immediately and as often as the department asks for a report.
(6)When the reserve of a bank falls below the legal requirements, the bank may not increase its loans or discounts except by discounting or purchasing bills of exchange payable at sight or on demand, and the department shall notify a bank whose reserve may be below the amount required to make good the reserve.
(7)In arriving at deposit liabilities with regard to bank deposits, the net balance of amounts due to and from other banks must be used as the basis for ascertaining the deposit liability to banks against which reserves are carried.
(8)Compliance by member banks with the federal reserve banking laws, rules, and regulations is compliance with the reserve requirements and conditions of this chapter and entitles those federal reserve member banks to the rights and privileges accruing from compliance with this chapter.