BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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statutory liquidity ratio
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cash reserve ratio
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bank deposit
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reverse repo
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Detailed explanation-1: -The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve Bank of India with reference to the demand and time liabilities (NDTL) to ensure the liquidity and solvency of the Banks.
Detailed explanation-2: -Every bank must have a particular portion of their Net Demand and Time Liabilities (NDTL) in the form of cash, gold, or other liquid assets by the end of the day. The ratio of these liquid assets to the demand and time liabilities is called the Statutory Liquidity Ratio (SLR).
Detailed explanation-3: -The under-noted liabilities will not form part of liabilities for the purpose of CRR; Paid up capital, reserves, any credit balance in the Profit & Loss Account of the bank, amount of any loan taken from the RBI and the amount of refinance taken from Exim Bank, NHB, NABARD, SIDBI.
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.