I did not say they did, but when a bank receives new currency, how do you think they get it? It just doesn’t magically appear in their vaults, converted by osmosis from those checks and wires. It’s borrowed from the Federal Reserve Bank. . . creating a credit entry on the sub-bank’s books.
They order it from the Fed. Each $20 FRN costs them $20.
It’s borrowed from the Federal Reserve Bank.
They buy it from the Fed, they don't borrow it. They use their reserve account to pay for it.
Meeting the Variable Demand for Cash
The public typically obtains its cash from banks by withdrawing cash from automated teller machines (ATMs) or by cashing checks. The amount of cash that the public holds varies seasonally, by the day of the month, and even by the day of the week. For example, people demand a large amount of cash for shopping and vacations during the year-end holiday season. Also, people typically withdraw cash at ATMs over the weekend, so there is more cash in circulation on Monday than on Friday.
To meet the demands of their customers, banks get cash from Federal Reserve Banks. Most medium- and large-sized banks maintain reserve accounts at one of the 12 regional Federal Reserve Banks, and they pay for the cash they get from the Fed by having those accounts debited. Some smaller banks maintain their required reserves at larger, "correspondent," banks. The smaller banks get cash through the correspondent banks, which charge a fee for the service. The larger banks get currency from the Fed and pass it on to the smaller banks.