That portion of total deposits which a commerical bank is required to keep with RBI as cash reserves is called ______.
A
CRR
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
B
SLR
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
OMO
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
Bank Rate
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution
The correct option is A CRR 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. The ratio is fixed by the central bank and is varied from time to time to control the supply of money in the economy depending upon the prevailing situation of inflation or deflation.