The Statutory Reserve Requirement (SRR) is a monetary policy instrument available to Bank Negara Malaysia (the Bank) for purposes of liquidity management, whereby banking institutions are required to maintain balances in their Statutory Reserve Accounts (SRA) equivalent to a certain proportion of their eligible liabilities (EL), this proportion being the SRR rate.
The SRR is a monetary policy instrument available to the Bank to manage liquidity and hence credit creation in the banking system, and 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—
(a) licensed banks and licensed investment banks, as defined under the Financial Services Act 2013; and
(b) licensed Islamic banks except for licensed international Islamic banks, as defined under the Islamic Financial Services Act 2013,
which shall be collectively referred to as “banking institutions” for purposes of this policy document.
This document belongs to Bank Negara Malaysia (BNM). Full access to the original source is available here: https://www.bnm.gov.my/banking-islamic-banking
