Explain why the money listed under assets on a bank balance sheet may not actually be in the bank?

A balance sheet is a monetary statement of a company's assets and liabilities. It aids in assessing the financial health and profitability of businesses at the end of each fiscal year. It explains the specifics of the expenses and income incurred during the current financial year.

The reserve ratio is defined as the percentage of deposits held by a commercial bank in accordance with the Reserve Bank of India's norms and regulations. It's also referred to as the cash reserve ratio. The difference between a bank's assets and liabilities is known as bank capital. The value of bank assets is the value following the sale.

Bank liability refers to a bank's obligation to return a specific sum of money. Banks are required by RBI legislation to have a specific amount of cash on hand and to deposit certain reserves with the RBI. The extra reserves that the bank retains are mostly used for lending.

The bank's entire reserves are separated into two categories: needed reserves and excess reserves. The money listed on the asset side is mostly held by the Reserve Bank of India, rather than by private banks. It is utilised in the event of an emergency or for a short-term effect.