Regulations Governing the Audit and Adjustment of Deposit and Other Liability Reserves of Financial Institutions Article 7

With the exception of the provisions under Paragraph 3, actual reserves set aside by financial institutions for items which require reserves, shall be limited to the following assets:1.Cash in vaults.2.Deposits in reserve accounts with the Department of Banking of the Bank or Trustee Institutions.3.Deposits that have been approved by the Bank for placement in "Interbank Funds Transfer Guarantee Special Accounts" with the Department of Banking of the Bank or to special accounts of similar properties with Trustee Institutions. The maximum amount of offsetting shall be a certain ratio of the required reserves for the current period. The ratio shall be announced by the Bank."Reserve accounts" as referred to in Subparagraph 2 of the preceding Paragraph shall mean the following two types of accounts:1.Reserve accounts A: Non-interest bearing accounts that can be deposited or withdrawn at all times by the financial institutions holding the accounts, either by issuing checks or by using the Bank's Interbank Funds Transfer and Settlement System.2.Reserve accounts B: These accounts are deposited and withdrawn by financial institutions using passbooks, but are not available except pursuant to the Bank's regulations or upon the exercise of pledge rights established pursuant to Article 15; such accounts may be interest bearing.Actual reserves set aside by financial institutions with respect to foreign currency items which require reserves are restricted to foreign currency deposits placed with the Department of Foreign Exchange of the Bank.