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Why are cash reserves with RBI considered assets for banks?

medium Q5 of 15
Banking Awareness - Basics Of Banking & Banking Terminology
Why are cash reserves with RBI considered assets for banks?
AThey are owned by the bank
BThey are payable to customers
CThey reduce bank liabilities
DThey earn interest from customers
Step-by-Step Solution

  1. Step 1: Identify ownership

    Assets are resources owned by the bank.

  2. Step 2: Apply definition

    Cash reserves belong to the bank and are under its control.

  3. Final Answer:

    They are owned by the bank → Option A

  4. Quick Check:

    Owned resources = assets ✅
Quick Trick: Owned by bank = asset.
Common Mistakes:
  • Assuming RBI-held cash is a liability.
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