GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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CRR funds are kept by the Banks in____?
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Balance with other banks
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Cash in hands at branches
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Funds in the currency chest
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Balance in a special accounts with RBI
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Explanation:
Detailed explanation-1: -Commercial banks must maintain the CRR in the form of cash balances with the RBI. These banks are not allowed to use the money for economic or commercial purposes.
Detailed explanation-2: -The Cash Reserve Ratio (CRR) refers to the share of Net Demand and Time Liabilities that banks have to hold as balances with the RBI. The objective of CRR is to keep inflation under control. During high inflation in the economy, the central bank raises the CRR to lower the bank’s loanable funds.
There is 1 question to complete.