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The ratio you're talking about is the amount that needs to be in the bank's account with the Federal Reserve as a fraction of its total liabilities. Only the money in that bank account qualifies for that reserve ratio; holding on to a literal stack of dollar bills in a bank vault somewhere does not.

That ratio is 0% because it's been judged that there are better ways to require solvency than doing that (chiefly, requiring capital buffers).

AFAIK reserve requirements (ie. cash on hand) was dropped to 0%, but capital requirements (ie. assets on hand) are still there.

When was the last time anyone lost the money in their checking account due to a bank failing in the US?