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    Question

    Consider the following statements about the Cash

    Reserve Ratio (CRR)? I. Under CRR, the banks have to hold a certain minimum amount of deposit as reserves with the central bank. II. The percentage of cash required to be kept in reserves as against the bank's total deposits. III. The cash reserve is either stored in the bank’s vault or is sent to the RBI. Which of the following statements is/are incorrect?
    A I & II Correct Answer Incorrect Answer
    B II & III Correct Answer Incorrect Answer
    C I & III Correct Answer Incorrect Answer
    D I, II & III Correct Answer Incorrect Answer
    E None of the statements are correct Correct Answer Incorrect Answer

    Solution

    Under cash reserve ratio (CRR), the commercial banks have to hold a certain minimum amount of deposit as reserves with the central bank. The percentage of cash required to be kept in reserves as against the bank's total deposits, is called the Cash Reserve Ratio. The cash reserve is either stored in the bank’s vault or is sent to the RBI.

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