Question

The minimum cash reserve ratio is fixed by _____.

• A. Resereve Bank of India
• B. State Bank of India
• C. LMF
• D. none of these

Answer 1

The correct option is A Resereve Bank of India

The amount, specified as the Cash Reserve Ratio (CRR), is held in cash and cash equivalents and is stored in bank vaults or parked with the Reserve Bank of India. The aim here is to ensure that banks do not run out of cash to meet the payment demands of their depositors. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.

Hence, option (A) is the correct answer.