GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A percentage of capital & reserves of the bank
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A percentage of aggregate deposits of the bank
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A percentage of aggregate loans and advances of the bank
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All of the above
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Detailed explanation-1: -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 4.50%.
Detailed explanation-2: -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. A bank does not earn interest on this liquid cash maintained with the RBI and neither can it use this for investing and lending purposes.
Detailed explanation-3: -Cash reserve Ration (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank of a country.