BANKING AFFAIRS

Detailed explanation-1: -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-2: -CRR includes cash reserves only, but SLR includes liquid assets such as gold, bonds, and securities as well. No interest is earned on the funds reserved as CRR, but banks earn on SLR. CRR funds are kept with the RBI, but SLR funds are kept with the bank itself.

Detailed explanation-3: -1.1 All primary (urban) co-operative banks (UCBs) (scheduled as well as non-scheduled) are required to maintain stipulated level of cash reserve ratio (CRR) and statutory liquidity ratio (SLR).

Detailed explanation-4: -The liabilities of a bank include call money market borrowings, certificates of deposit and investment in deposits in other banks. In short, the higher the Cash Reserve Ratio, the lesser is the amount of money available to banks for lending and investing.

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.