BANKING AFFAIRS

Detailed explanation-1: -The government is required to maintain a minimum balance of ₹10 crore in its account on a daily basis and ₹100 crore on Fridays (Reddy 2002).

Detailed explanation-2: -Reserve Bank of India has not issued any guidelines regarding the minimum balance to be maintained in savings bank accounts.

Detailed explanation-3: -This is the RBI’s way of controlling the excess flow of money in the economy. The cash balance that is to be maintained by scheduled banks with the RBI should not be less than 4% of the total NDTL, which is the Net Demand and Time Liabilities. This is done on a fortnightly basis.

Detailed explanation-4: -In semi-urban locations, the minimum monthly limit is set at ₹5, 000. In rural areas, the bank requires its savings account customer to maintain an average quarterly balance of ₹ 2, 500. In failure to maintain AMB, the bank levies a penalty and other charges on the customer.

Detailed explanation-5: -The Reserve Bank of India (RBI) will transfer Rs 30, 307 crore as surplus to the government for 2021-22, the central bank said in a statement following its board meeting on Friday. The decision was taken after deciding to maintain the contingency risk buffer at 5.50 per cent of its balance sheet.