If the total deposits created by commercial banks is ₹ 10,000 crores and legal reserve requirements is 40%, then amount of initial deposits will be ____.
If the total deposits created by commercial banks is ₹ 10,000 crores and legal reserve requirements is 40%, then amount of initial deposits will be ____.
(a) ₹ 2,000 crores
(b) ₹ 3,000 crores
(c) ₹ 4,000 crores
(d) ₹ 14,000 crores
Anurag Pathak Changed status to publish December 26, 2023
Ans – (c)
Solution:-
Deposit Creation = Initial Deposit × 1/LRR
₹ 10,000 = Initial Deposit × 1/40%
Initial Deposit = 10,000 × 40/100
Initial Deposit = 4,000 Crores
Anurag Pathak Changed status to publish December 26, 2023
