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Q.

How much per cent of banks keep deposits as cash with themselves?


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a

15%

b

18%

c

20%

d

24% 

answer is A.

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Detailed Solution

Banks keep15% deposits as cash with themselves.
Credit activities are the main source of income for banks. They use a major part of the deposits to
      extend loans but keep a small portion of their deposits as cash. It is kept to pay the depositors who might come to the bank to withdraw money on any given day. Banks keep 15% of their deposits as cash with themselves. They kept just a small portion because they know all depositors do not come to the bank to withdraw money simultaneously and do not withdraw the entire amount in one go.
 
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