BANKING AFFAIRS

Detailed explanation-1: -Notes: The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve bank of India as a portion of their Net Demand and Time Liabilities (NDTL).

Detailed explanation-2: -Net Demand and Time Liabilities (NDTL) Demand deposits consist of all liabilities, which the bank needs to pay on demand. They include current deposits, demand drafts, balances in overdue fixed deposits, and demand liabilities portion of savings bank deposits.

Detailed explanation-3: -4th May 2022 – Reserve Bank of India (RBI) raised cash reserve ratio (CRR) by 50 basis points to 4.50% effectvie May 21. 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.

Detailed explanation-4: -Net Demand and Time Liabilities (NDTL): It is the difference between the sum of demand and time liabilities (deposits) of a bank (with the public or the other bank) and the deposits in the form of assets held by the other banks.

Detailed explanation-5: -Time liabilities refer to the liabilities which the commercial banks are liable to repay to the customers after an agreed period, and demand liabilities are customer deposits which are repayable on demand.