Only a part of the total deposits is kept as cash in the bank-safe. Why is this so and how does this benefit the bank?

Only a part of the total deposits is kept as cash in the bank-safe it is because bank has to pay only the certain amount that is in demand by the depositor and especially during the particular time -period like in the beginning of the month.

This benefits the bank because this way they can keep up the trust of the depositor. The banks have to earn a certain amount of profit and have to run the bank by maintaining the equipment’s (ATM) and to meet all the costs related to the maintenance of the bank. They have to pay salary to its employees and interest to the depositors. This way they use the other part of the total deposits.