Question

As per the RBI, commercial banks hold approximately 15% of the total cash to arrange for daily withdrawl by depositors. What do the commercial banks do with the remaining 85%?

• A. Lend to the public
• B. Lend to the RBI
• C. Lend to other commercial banks
• D. Lend to the government

Answer 1

Answer: (A), (B), (C)

Lend to other commercial banks

Commercial banks accept deposits and lend loans. They lend to the public, the RBI, and other commercial banks in need. The government takes loans from the RBI.