Concept:Banks hold a fixed part of their total assets in very liquid forms to meet daily cash withdrawals safely.
Explanation:Commercial banks cannot lend out every deposit they receive.
They must keep some reserves as cash or quickly convertible assets.
This proportion of total assets kept in highly liquid form is called the cash ratio.
Demand deposit is money a customer can withdraw at any time, not a ratio.
Fixed deposit is money kept for a fixed period and is less liquid.
Moral suasion is the central bank’s method of persuasion, not an asset ratio.
So the correct term matching the question is the cash ratio.
Answer:C. cash ratio