The RBI requires every commercial bank to hold a fixed share of its deposits as reserves with the RBI itself. What is this share called?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Cash reserve ratio
The cash reserve ratio (CRR) is the part of their deposits that commercial banks must keep as reserves with the RBI. By raising or lowering the CRR, the RBI controls how much money the banks can lend.