37. The portion of the Cash Balances deposited, under the above arrangements, with the three Presidency Banks varies, of course, from week to week. The amount normally placed with the Head Offices of the Banks has fluctuated for some time in the neighbourhood of £1,000,000. In addition to this, further sums, fluctuating about £1,500,000, are held at branch offices of the Banks. These are deposited on a different understanding (see p. 184, footnote) from that governing the sums at the Head Offices, and are held literally at call, the amounts at particular branches being subject to wide variations. The total sums placed with the Banks, head and branch offices together, are usually about £2,000,000, and the maximum deposits in recent years have been about £3,000,000. On these deposits, as in the case of the Bank of England and the British Government deposits, the Banks pay no interest. The whole of the rest of the Government Balances is maintained in cash (rupees, notes, or sovereigns) in the various Government Treasuries. This is the present position. The Government are free in exceptional circumstances, as we have seen above, to place additional sums with the Presidency Banks on which interest is payable. But advantage has not been taken of these powers recently. 38. In view of the facts mentioned at the end of § 36, I am of opinion that the Reserve Treasury system needs reconsideration and that at present rather more funds, perhaps, than is necessary are withdrawn from the use of the Money Market into the Treasuries. But the critics referred to in § 35 are following a false track when they argue that much offence lies in the present use of the Cash Balances, and that the main remedy for the seasonal stringency of the Indian Money Market is to be found in lending out these balances in India during the busy season. In thinking that any substantial remedy is to be obtained by loans from this source, they are paying too much attention to the transient circumstances of a single year. I believe, for the reasons given below, that the Indian Money Market cannot expect very much assistance from the Cash Balances, and that they have much more to hope for in the future from the growing resources of the Paper Currency Reserve.