Commercial banks are required to hold reserves equal to the total amount of customer deposits they have, which means they cannot lend any of their deposits out.

Commercial banks have a rule called reserve requirements, which means they must keep a certain amount of money on hand that matches the deposits made by customers. This is important because it ensures that banks have enough cash available to meet withdrawal requests from customers. However, banks are actually allowed to lend out a portion of the deposits, not the entire amount. For example, if a bank has $1 million in deposits and the reserve requirement is 10%, it must keep $100,000 in reserves but can lend out the remaining $900,000. This system helps the bank make money through interest on loans while still being able to provide for customers' needs.