BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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New Demand and Tenure Liabilities
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Net Demand and Time Liabilities
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National Deposits and Total Liquidity
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Net Duration and Total Liquidity
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Detailed explanation-1: -Every scheduled bank must maintain not less than 4% of the total NDTL (Net Demand and Time Liabilities) as cash balance with the RBI. This has to be revisited every fortnight.
Detailed explanation-2: -The cash balance that is to be maintained by scheduled banks with the RBI should not be less than 4% of the total NDTL, which is the Net Demand and Time Liabilities. This is done on a fortnightly basis. NDTL refers to the total demand and time liabilities (deposits) that are held by the banks.
Detailed explanation-3: -What is CRR? In simple terms, the Cash reserve ratio is a certain percentage of cash that all banks have to keep with the RBI as a deposit. This percentage is fixed by the RBI and is changed from time to time by the central bank itself. Currently, the CRR is fixed at 3%.
Detailed explanation-4: -All Scheduled Commercial Banks are at present required to maintain with Reserve Bank of India a Cash Reserve Ratio (CRR) of 5.00 per cent of the Net Demand and Time Liabilities (NDTL) (excluding liabilities subject to zero CRR prescriptions) under Section 42(1) of the Reserve Bank of India Act, 1934.