of the total CRR requirement on all days of the fortnight. .
– To make payments to and receive amounts from other commercial banks. This may be
with regard to investment transactions or clearing or other interbank transaction including
borrowing from or lending to commercial banks.
– Cash with other banks
• Accounts are kept with other banks for commercial needs. Banks in India often maintain
accounts with banks in other countries for trade transactions.
• Accounts may be maintained with other banks in India for convenience especially if the
bank does not have a branch in a particular location or alternatively if services of another
bank is availed of for cash management or clearing or other services.
Cash in hand
Cash is kept by banks to meet day to day needs.
The amount kept by a bank will vary from bank to bank and from branch to branch as
the demands of customers will vary.
Banks will aim to keep the minimum they require to meet needs as cash is unproductive
and earns no interest.
The cash held in a bank branch may be divided into cash:
• In the vault and
• With tellers.
• Cash in the vault
– The amount kept in the vault is the total the branch estimates is required to meet its
needs. It is usually for this amount or slightly more that the bank will take insurance
– This money is kept in a safe inside a strong room or a vault and is under the custody of a
• Cash with tellers
– Normally at the start of each day, the cashier hands over to tellers cash for the day. The
amount handed out to tellers will depend on the bank and the usual volume of transactions
the bank has.
– In addition each teller often has a certain amount in his box as bait money. This consists
of assorted notes. The numbers of these notes are marked and the intent is to hand these
over if a robbery takes place. The fact that the numbers of these notes are recorded can
help trace the notes to those who robbed the bank.
– During the day if a teller needs more money he would either borrow the amount he