808 KAR 1:020.
Excess funds transactions.
RELATES TO: KRS 286.3-280,
KRS 286.1-011, 286.1-020
AND CONFORMITY: To establish the status of excess funds (federal funds)
transactions so as to insure the maintenance of competitive equality between
state and national banks in Kentucky.
Section 1. For
purposes of this regulation, the term "excess funds transactions"
(federal funds transactions) shall be defined as transactions between
commercial banks involving the adjustment of their legal reserve positions
through the short term transfer of reserve deposits.
Section 2. Excess
funds transactions between state banks and between state and national banks
shall be regarded as the interbank transfer of reserve deposits and, as such,
are not in the nature of interbank loans or lending activities.
State-chartered banks may sell and purchase unlimited amounts of excess funds,
and such excess funds transactions shall not be subject to the maximum lending
provisions of KRS 286.3-280.
Section 4. The
reserve requirements and other provisions of KRS 286.3-300 do not apply to
excess funds transactions. (BR-73-1; 1 Ky.R. 885; eff. 5-14-75; TAm eff.