Principal Terms and Conditions of Complementary Deposit Facility

January 29, 2016

Revision : March 15, 2016
April 28, 2016
March 16, 2020
April 27, 2020
March 19, 2021
September 22, 2021
December 17, 2021
June 16, 2023
March 19, 2024
July 31, 2024

1. Purpose

These Terms and Conditions prescribe the principles of interest on current account balances and the special reserve account balances at the Bank of Japan with the aim of facilitating smooth money market operations.

2. Eligible Institutions

Institutions shall satisfy one of the eligibility criteria listed below and shall have no obstacles to become eligible.

1. (1) Institutions shall be designated financial institutions (hereinafter referred to as the "DFIs") as defined in Article 2, Paragraph 1 of the Law Concerning Reserve Deposit Requirement System (Law No.135, 1957, hereinafter referred to as the "Law").
2. (2) Institutions which are not DFIs shall have a current account at the Bank and shall be financial institutions, etc. as defined in Article 37, Paragraph 1 of the Bank of Japan Act (Act No. 89, 1997).

3. Balances on Which Interest is Paid

Current account balances and the special reserve account balances at the Bank (hereinafter referred to as the "CABs").

4. Interest Rate

The interest rate shall be 0.25 percent per annum.

5. Calculation of Interest

The interest each institution receives for each reserve maintenance period (as defined in Article 7, Paragraph 3 of the Law) for which interest is calculated (hereinafter referred to as the "Designated Reserve Maintenance Period" or "DRMP") shall be the amount obtained by multiplying aggregated excess reserve balances and the interest rate stipulated in Paragraph 4. (excluding the case where the aggregated excess reserve balances are negative). Aggregated excess reserve balances are the sum of the amount of CABs each day during the DRMP less the product of the amount of required reserve per day (as defined in Article 2, Paragraph 2 of the Law) of the institution during the DRMP and the number of days of this period.

6. Exception

If the Bank specifically deems it practically necessary in order to conduct money market operations smoothly, in accordance with the purpose of the complementary deposit facility, the Bank can make exceptions to the terms and conditions stipulated from Paragraph 2. to Paragraph 5. above.