At a given cash reserve ratio of 50% with deposits of ₹1000, the amount which can be used to give loans by the bank.

₹500

The correct answer is Option (2) → ₹500

The Cash Reserve Ratio (CRR) is the percentage of total deposits that a bank is required to keep with the central bank (e.g., RBI) in the form of reserves. The remaining amount can be used for lending or investment.

Given:

• CRR = 50%

• Total deposits = ₹1000

Amount to be kept as reserve: 50% of ₹1000=₹500

Amount available for lending: ₹1000−₹500 = ₹500