The Cash Reserve Ratio (CRR) is:
Athe percentage of deposits a bank must keep as cash reserves
Bthe interest a bank charges on loans
Cthe profit margin earned by banks
Da tax levied on bank deposits
Answer & Solution
Correct answer: A. the percentage of deposits a bank must keep as cash reserves
CRR is the legally required percentage of deposits a bank must hold as cash reserves with the RBI, capping how much it can lend.
Related questions
The total stock of money in circulation among the public at a point of time is called:Acting as the 'lender of the last resort' to commercial banks is a function performed by tIn a barter economy, exchange requires that each party wants exactly what the other offersCommercial banks are able to create credit primarily on the basis of their:The currency held by the public plus the reserves of commercial banks together form the:Deposits that can be withdrawn on demand, such as in a current or savings account, are calThe rate at which the central bank lends short-term funds to commercial banks is the:The minimum percentage of deposits that commercial banks must keep with the central bank i