Question

Specifies the minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the Central Bank.

• A. Statutory Liquidity Ratio
• B. Cash Reserve Ratio
• C. Repo Rate
• D. Reverse Repo rate

Hint:

CRR controls liquidity in the economy by ensuring banks keep a fraction of deposits with the central bank.

Answer 1

The Correct Option is B

Step 1: Understand the terms.
- Cash Reserve Ratio (CRR) → Minimum fraction of deposits banks must hold with RBI in cash.
- Statutory Liquidity Ratio (SLR) → Minimum fraction of deposits banks must maintain in approved securities.
- Repo Rate / Reverse Repo Rate → Interest rates, not reserves.