Question

The Reserve Bank of India changes the cash reserve ratio from time.

• A. True
• B. False

Answer 1

The correct option is A True

The Reserve Bank of India changes the cash reserve ratio from time- this is a true statement. Cash reserve ration is one of the quantitative methods of controlling credit creation capacity of the commercial bank. During inflation, Cash reserve ration is raise in order to reduce the money supply in an economy to check inflation and vice-versa.