In what way can banks respond to low reserves?

In what way can banks respond to low reserves? 

Ans. There are three ways of responding to low reserves. 

(a) Liquidating some of the assets: It can liquidate some of its existing assets but it would not be a feasible situation if assets are illiquid. 

(b) Call Money: Banks can borrow from each other on a short-term basis. It is called call money. It is borrowed for a fortnight or so. 

(c) Lender of last resort: They can get help from RBI as a ‘lender of last resort’. Central bank gives loans to commercial banks in such a situation for short duration.