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    Question

    Banks in India have to maintain a portion of their

    demand and time liabilities with the Reserve Bank of India. This portion is called?
    A Repo Rate Correct Answer Incorrect Answer
    B Cash Reserve Ratio Correct Answer Incorrect Answer
    C Reverse Repo Rate Correct Answer Incorrect Answer
    D Statutory Liquidity Ratio 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. CRR is 4%. 

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