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Question
The portion of total deposit of commercial banks which is required to be kept with Central Bank in the form of cash deposit is called _________.
The portion of total deposit of commercial banks which is required to be kept with Central Bank in the form of cash deposit is called _________.
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Solution
The correct option is C CRR
Cash Reserves Ratio (CRR) refers to the
proportion of total deposit of the commercial banks which they must keep as reserves with the central bank in the form of cash deposits. In other words, these are the cash deposits of commercial banks with the central bank which they have to deposit as a legal requirement with 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 deposit of the commercial banks which they must keep as reserves with the central bank in the form of cash deposits. In other words, these are the cash deposits of commercial banks with the central bank which they have to deposit as a legal requirement with 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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