Banks in India are required to maintain a portion of their demand and time liabilities with the Reserve Bank of India. This portion is called __________.

Statutory Liquidity Ratio

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Cash Reserve Ratio

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Bank Deposit

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Reverse Repo

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Government Securities

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Solution

The correct option is B Cash Reserve Ratio
The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve Bank of India with reference to the demand and time liabilities (NDTL) to ensure the liquidity and solvency of the Banks. This proportion is specified by RBI and could change from time to time.

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