BANKING AFFAIRS

Detailed explanation-1: -The Cash Reserve Ratio (CRR) is the percentage of total deposits a bank must have in cash to operate risk-free. The Reserve Bank of India decides the amount and is kept with them for financial security. The bank cannot use this amount for lending and investment purposes and does not get any interest from the RBI.

Detailed explanation-2: -Cash Reserve Ratio (CRR) is the share of a bank’s total deposit that is mandated by the Reserve Bank of India (RBI) to be maintained with the latter as reserves in the form of liquid cash. Click here to know about SLR & Repo Rate. Current cash reserve ratio is at 4%, this will be changed to 4.5% from May 21st.

Detailed explanation-3: -Cash reserve ratio (CRR) is the percentage of a bank’s total deposits that it needs to maintain as liquid cash. This is an RBI requirement, and the cash reserve is kept with the RBI.

Detailed explanation-4: -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-5: -Commercial banks are required to maintain an average cash balance with the RBI, the amount of which shall not be less than 3% of the total of Net Demand and Time Liabilities (NDTL) on a fortnightly basis.