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

To pay salaries to the staff

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To extend loans to the poor

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To extend loan facility

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To pay the depositors who might come to withdraw money

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Solution

The correct option is D
To pay the depositors who might come to withdraw money

To pay the depositors who might come to withdraw money.

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Similar questions

Q. Banks in India these days hold about _________ percent of their deposits as cash, as a provision to pay the depositors who might come to withdraw money from the bank on any given day.

Q. People deposit money in banks. A certain percentage of the total deposit is kept as cash for depositors to withdraw. What happens to the remaining proportion of the total deposit?

Q. Alex took a loan of ₹4000. He paid ₹400 per month for a year to pay back the loan. How much extra money did he pay the bank (in Rupees)?

How are banks extending loans to the public?

A borrower comes into the bank and pays off 100 Rupees of his loan. This was a cash payment by the borrower to the bank. What will the bank do because of this loan repayment?

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

The correct option is D To pay the depositors who might come to withdraw money To pay the depositors who might come to withdraw money.

The correct option is D
To pay the depositors who might come to withdraw money

To pay the depositors who might come to withdraw money.