Banks in India hold a small percentage of their deposits as cash. This cash deposit is known as .

cash deposit

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demand deposit

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reserve

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deposit

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Solution

The correct option is C reserve
Banks in India hold around 15% as cash with themselves and with the RBI. This cash deposit is known as 'reserve'. This helps to ensure that there is money available to the people even if there are large spendings by the bank.

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Why do banks keep a small portion of deposits as cash with themselves?

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