Question

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

Answer 1

As the deposits are used by banks to provide loans,the banks keep small proportion with them to if in case  is any withdrawal.

Answer 2

Answer:

HERE IS YOUR ANSWER DEAR..

Explanation:

. 1. Banks keep only a small proportion of their deposits as cash with themselves.

2. Banks in India these days hold 15 percent of their cash deposits as cash.

3. This is kept as provision to pay the depositors who might come to withdraw money from the bank on any given day.

4. Since on any particular day, only some of its many depositors come to withdraw cash, the bank is able to manage with this cash.