Economics · Banking System
What does a commercial bank typically do if it faces a shortage of funds and has no excess reserves to meet its immediate payment obligations?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Borrow either from the interbank call money market or directly from the Central Bank✓
- 2Unilaterally increase interest rates on existing fixed deposits
- 3Permanently halt all customer transactions
- 4Withdraw or recall existing long-term loans from customers immediately
Correct answer
Borrow either from the interbank call money market or directly from the Central Bank
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