Practicing Success
Practicing Success
CUET Preparation Today
Cash Reserve Ratio (CRR) is : |
Percentage of deposits a bank keeps as cash reserve Some reserves to keep in liquid form by Reserve Bank of India Sum of Reserves and Loans by the Commercial Bank The people keep as deposits in the house |
Percentage of deposits a bank keeps as cash reserve |
The correct answer is option (1) : Percentage of deposits a bank keeps as cash reserve The RBI decides a certain percentage of deposits which every bank must keep as reserves. This is done to ensure that no bank is ‘over lending’. This is a legal requirement and is binding on the banks. This is called the ‘Required Reserve Ratio’ or the ‘Reserve Ratio’ or ‘Cash Reserve Ratio’ (CRR). Cash Reserve Ratio (CRR) = Percentage of deposits which a bank must keep as cash reserves with the bank. |
