wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Q. Consider the following statements with respect to Cash Reserve Ratio (CRR):

Which of the statements given above is/are correct?

A

1 only
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
B

1 and 2 only
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C

3 only
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D

1, 2 and 3
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is A
1 only
Explanation:

Statement 1 is correct: The CRR denotes a certain percentage of total deposits the commercial banks, which are required to maintain in the form of cash reserves with the central bank.

Statement 2 is incorrect: The cash is either stored with the bank themselves or is sent to the RBI. Banks do not get any interest on the money that is with the RBI under the CRR.

Statement 3 is incorrect: At the time of high inflation in the economy, RBI increases the CRR, so that banks need to keep more money in reserves so that they have less money to lend.

flag
Suggest Corrections
thumbs-up
0
similar_icon
Similar questions
View More
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Simple Interest and Compound Interest
QUANTITATIVE APTITUDE
Watch in App
Join BYJU'S Learning Program
CrossIcon