Cash Reserve Ratio?

Answer

The cash reserve ratio for a bank refers to the minimum amount of money that the bank is allowed to have in the vault at anytime. The cash reserve ratio is a percentage of the banks total deposits. This cash reserve ratio was put into place to be sure that the bank does not run out of money for the amount of deposits and withdraws are made. If prevents the bank from running out of money when there are several more withdraws than deposits.
Q&A Related to "Cash Reserve Ratio?"
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