Question
The Cash Reserve Ratio (CRR) is revised by RBI to
improve liquidity. Which of the following correctly describes the CRR? ÂSolution
CRR, or Cash Reserve Ratio, is the percentage of a bank's total deposits that they are required to keep with the Reserve Bank of India (RBI) as reserves . The minimum CR requirement is specified by RBI which is a percentage of the Net Demand and Time Liabilities (NDTL) of the bank.  Banks can not lend the CRR money to corporates or individual borrowers, nor use that money for investment purposes. Banks do n o t earn any interest on that CRR.
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