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Qualitative Instruments

What is the t...

Question

What is the term used for the ratio of the Cash Reserves that the banks are required to keep with the RBI?

A

Liquidity ratio

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B

SLR

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C

CRR

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D

Net demand and Time liability

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Solution

The correct option is C CRR
CRR refers to the cash reserve ratio. It refers to the amount that is to be kept by the commercial banks as minimum reserve in the form of cash with the central bank, i.e., RBI.

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For Cash reserve ratio (CRR) requirements, banks have to keep/maintain

Q. Banks in India are required to maintain a portion of their demand and time liabilities with the Reserve Bank of India. This portion is called __________.

Q. As we all know, Banks in India are required to maintain a portion of their demand and time liabilities with the Reserve Bank of India. What is this portion is called?

Q. Which of the following statements about banking operations is correct as they help banks to run their shops?
A. The public holds as much currency (M) as it desires to hold with it and therefore any additional money earned by it is placed in the form of deposits with banks.
B. The banks lend all the deposits received by them from public up to the minimum legal cash reserve ratio requirement determined by the RBI. It means banks do not keep any excess cash reserves with themselves.
C. The minimum legal Cash Reserve ratio is set by the RBI.
D. Bank's assets are only in the form of Cash Reserves and loans and its liabilities comprise only of the demand deposits.

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

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