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Q.

The ____ monitors if the banks are maintaining a minimum cash balance out of their deposits.


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Detailed Solution

The RBI monitors if the banks maintain a minimum cash balance out of their deposits. This is one of the many functions performed by the central bank. If the banks do not maintain the required minimum reserves, they would have to pay a fine. Some other functions of the RBI are issuing bank notes, maintaining and operating the government's bank accounts, and lending to banks when they are in a crisis.
 
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