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Question
That portion of total deposits which a commerical bank is required to keep with RBI as cash reserves is called ______.
That portion of total deposits which a commerical bank is required to keep with RBI as cash reserves is called ______.
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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.
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.
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