What do the banks do with the deposits which they collect from the pub – InterviewSolution

1.	What do the banks do with the deposits which they collect from the public?
Answer» Banks keep only a small proportion of their deposits as cash with themselves. Banks in India these days hold about 15% of their deposits as cash. This is kept as provision to pay the depositors who might come to withdraw money from the bank on any given day. Banks use the major portion of the deposits to extend loans. There is a huge demand for loans for various economic activities.

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