Prior to the reduction of reserve requirement ratios to zero percent, a reserve balance requirement was the portion of an institution’s reserve requirement that was not satisfied by its vault cash and therefore had to be maintained either directly with a Reserve Bank or in a pass-through arrangement with a correspondent institution.

As announced (Off-site) on March 15, 2020, the Board reduced reserve requirement ratios to zero percent, effective March 26, 2020, in light of the shift to an ample reserves regime. This action eliminates the need for thousands of depository institutions to maintain balances in accounts at Reserve Banks to satisfy reserve requirements, thereby freeing up liquidity in the banking system to support lending to households and businesses.

Currently, the Board has no plans to re-impose reserve requirements. However, the Board may adjust reserve requirement ratios in the future if conditions warrant.