query in banking regulation act

NAMAN SINGHAL (CA final , CS final) (228 Points)

05 February 2011  

can anybody explain me the text in section 18 of banking regulation act

"every banking co.shall maintain by way of cash reserve or by way of balance in current account with RBI, a sum equivalent to atleast 3% of the total demand & time liabilities as on last friday of the second preceding fortnight"

 

kindly explain the coloured text?