Money, defined broadly, includes profit hand and balances along with other banks like the RBI. Banks hold balances with all the RBI since they are required statutorily to do this underneath the money book requirement. Such balances are known as statutory or needed reserves. Besides, banking institutions hold voluntarily cash that is extra meet up with the day-to-day drawals from it by their depositors.

Money as defined above isn’t the thing that is same money reserves of banking institutions. Read More