Q.What is call money and notice money? How do they help commercial banks?

Call money and notice money are how banks solve their own very short-term cash mismatches, borrowed straight from each other.

Call money refers to funds that commercial banks borrow from, and lend to, each other for a period of exactly one day (overnight). Notice money refers to the same kind of interbank borrowing/lending, but for a period beyond one day, up to 14 days.

Both exist to help banks manage their day-to-day liquidity: a bank that finds itself short of funds on a particular day — perhaps because of an unexpected large withdrawal or payment obligation — can borrow the shortfall overnight (or for a few days) from another bank that happens to have a temporary surplus that day, rather than being forced into a genuine liquidity crisis or having to sell off other assets at short notice. Because it settles bank-to-bank, extremely short-term liquidity mismatches, the call/notice money …

Confusing call/notice money (interbank borrowing, banks lending to other banks) with a bank taking a deposit from an ordinary customer — cal …