The Czech National Bank (CNB) decided on Thursday to cancel paying interest on banks' mandatory minimum reserves from Oct. 5, a move to reduce the costs of implementing monetary policy.
The decision follows a similar move by the European Central Bank in July.
Komercni Banka said its stipulated amount of required minimum reserves for the current maintenance period stood at approximately 19.6 billion Czech crowns ($861.12 million).
Banks have been required to keep a portion of liabilities at the central bank as reserves.
Mandatory minimum reserves are not used as a monetary policy instrument but can act as a liquidity buffer to ensure the smooth flow of interbank payments, the central bank said.
Persons:
Dado Ruvic, Komercni Banka, MONETA, Banks, Jason Hovet, Jan Lopatka, Andrew Cawthorne
Organizations:
REUTERS, Rights, Money Bank, Prague Stock Exchange, Czech National Bank, European Central Bank, Analysts, Komercni, KB, Thomson
Locations:
Komercni Banka, Komercni, BKOM.PR, Czech, Prague