20. Section 93 of the principal enactment is hereby repealed and the following section substituted therefor :-
| 93.
| | (1) The Monetary Board shall, in order to limit the volume of money created by the credit operation of the financial system, require commercial banks and such other financial institutions operating in Sri Lanka as may be prescribed by the Monetary Board (in this part referred to as the "prescribed financial institutions") to maintain reserves against their deposit liabilities and such of their other financial liabilities as the Monetary Board may consider necessary and shall, for that purpose, prescribe the classes of deposit liabilities and the categories of other financial liabilities against which reserves are required to be maintained. | | |
| | (2) The reserves required to be maintained by a commercial bank, or a prescribed financial institution under subsection (1), shall be proportionate to the volumes respectively, of each class of its deposit liabilities and each class of its deposit liabilities and each shall, subject to subsection (4), take the form of rupee deposits in the Central Bank. | | |
| | (3) The accounts maintained at the Central Bank by prescribed financial institutions under subsection (2), shall be maintained only for the purpose of keeping the rupee deposits required to be maintained as reserves by such financial institutions. | | |
| | (4) The Monetary Board may in the interest of the national economy and the banking and financial systems of the country, permit the maintenance of any part of the reserves required to be maintained under subsection (1), in the form of assets other than rupee deposits in the Central Bank. | | |
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Sri Lanka Consolidated Acts