61. “Fractional reserve banking” is a term used to describe a banking system whereby Banks hold reserves equal to a multiple of their demand deposit liabilities. O Banks are required to quote interest rates in fractions. Banks hold reserves equal to only a fraction of their demand deposits liabilities based on a reserve ratio. Individual banks share a fraction of the total funds deposited in the whole banking system.
Option c) is correct.
Fractional reserve banking is a system in which only a fraction
of bank deposits are backed by actual cash on hand and available
for withdrawal. This is done to theoretically expand the economy by
freeing capital for lending.