The percentage of cash required to be kept in reserves as against the bank’s total deposits, is called the Cash Reserve Ratio. You can read about the Cash Reserve Ratio (CRR)- Repo Rate & Reverse Repo Rate (UPSC Notes) in the given link.
A specific CRR is provided to each commercial bank in India by the RBI. Cash Reserve Ratio (CRR) ensures that the banks do not run out of money.
Further readings:
- RBI – Reserve Bank of India [UPSC Indian Economy Notes]
- Bad Banks – Idea Proposed by Indian Banking Association (IBA) Due to COVID-19
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