Question

Cash reserve ratio is fixed by the central bank.

• A. True
• B. False

Answer 1

The correct option is A True

True.

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must have keep as cash reserves with the central bank in the form of cash. Cash reserve ratio is determined by central bank so that they can control the amount of credit creation of the commercial banks at the time of inflation or deflation in the economy.