Question

for what purpose banks keeps small portion of the deposit as cash with themselves?

Answer 1

Banks keep a small proportion of the deposits as cash for themselves this is called the Cash Reserve Ratio (CRR). This is kept as a provision to pay the depositers who might come to withdraw money from the bank on any given day. Since,on any particular day, only some of it's many depositers come to withdraw cash,the bank is able to manage with the cash.

Answer 2

Answer:

1)banks keeps only a small portion of their deposits as cash with themselves.

2)banks in India these days hold 15%of their deposits as cash.

3)this is kept as provision to pay the deposit era who might come to withdrawn money from the bank in any given day.

4)since on any particular day, only some of its many depositers come to withdrawn cash, the bank is able to manage with this cash