Question

The Cash Reserve Ratio (CRR) is revised by RBI to

Q: Answer-The Cash Reserve Ratio (CRR) is revised by RBI to improve liquidity. Which of the following correctl...

CRR, or Cash Reserve Ratio, is the percentage of a banks 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.

improve liquidity. Which of the following correctly describes the CRR?

A Interest-earning deposits kept by commercial banks with another bank

B Interest-free deposits kept by commercial banks with another bank

C Interest-earning deposits kept by commercial banks with RBI

D Interest-free deposits kept by commercial banks with RBI

E None of the above

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The Cash Reserve Ratio (CRR) is revised by RBI to

Solution