Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

The ratio of total deposits that a commercial bank has to keep with RBI is called :

Options:

Cash Reserve ratio

Statutory liquidity Ratio

Deposit ratio

Margin ratio

Correct Answer:

Cash Reserve ratio

Explanation:

The correct answer is option (1) : Cash Reserve ratio

The ratio of total deposits that a commercial bank has to keep with the Reserve Bank of India (RBI) is called the Cash Reserve Ratio (CRR).

Statutory Liquidity Ratio (SLR) : SLR is the percentage of a bank's total deposit that it has to maintain in the form of liquid assets, such as cash, gold reserves, and government-approved securities. It is a way to ensure the liquidity and solvency of the bank.