BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The percentage of total cash money received as deposits by banks
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The percentage of cash in hand balance with central bank to the aggregate deposits
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The percentage of cash in hand with amount of loan given to customer
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The percentage of assets to liabilities of bank
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Detailed explanation-1: -3.3 Cash Deposit ratios: Cash-deposit ratio of scheduled commercial banks is the ratio of cash in hands and balances with the RBI as percentage of aggregate deposits. Here, balance with RBI is nothing but CRR balances with RBI. It indicates how much cash banks maintain for each rupee of deposit they accept.
Detailed explanation-2: -Cash Reserve Ratio (CRR) is the share of a bank’s total deposit that is mandated by the Reserve Bank of India (RBI) to be maintained with the latter as reserves in the form of liquid cash. Click here to know about SLR & Repo Rate. Current cash reserve ratio is at 4%, this will be changed to 4.5% from May 21st.
Detailed explanation-3: -The cash-deposit ratio for a bank is equal to (total cash)/(total deposits). The bank must maintain liquidity to operate and will hold an amount of cash to service net withdrawals from customer activities such as drawing from their deposit (checking and savings) accounts.
Detailed explanation-4: -Banks in India hold around 15% as cash with themselves and with the RBI. This cash deposit is known as ‘reserve’. This helps to ensure that there is money available to the people even if there are large spendings by the bank.
Detailed explanation-5: -To calculate the loan-to-deposit ratio, divide a bank’s total amount of loans by the total amount of deposits for the same period. You can find the figures on a bank’s balance sheet.