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What is deposit reserve? What is the use?

Edit: kristina Source: melt 360 finishing Date: 2015-06-25

Summary:

The deposit reserve is the deposit at the central bank prepared by the financial institution for the purpose of guaranteeing the withdrawal of deposits and the settlement of funds by the financial institution. The ratio of the deposit reserve required by the central bank to the total deposit amount is the deposit reserve ratio. The deposit reserve ratio is usually determined by the central bank

 

  Deposit reserveWhat is it? Is a deposit made by a financial institution for the purpose of guaranteeing the user's withdrawal of deposit and fund settlement needs. The ratio of the deposit reserve required by the central bank to the total deposit amount is the deposit reserve ratio. The deposit reserve ratio is usually determined by the central bank, known as the deposit reserve ratio.

 

Under the modern financial system, the reserve of a financial institution is divided into two parts, one part has its own business warehouse in the form of cash, and the other part is deposited with the central bank in the form of deposits, which is the deposit reserve.

 

What is the use of deposit reserve?

 

"Deposit reserve", under normal circumstances are not allowed to use, to ensure that commercial banks to pay customers withdrawals. At the same time also have the function of clearing funds, but also a monetary policy tool.

 

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