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Banking Term: Cash Reserve Ratio

Dec 30, 2014 12:38 IST

    Definition

    Every commercial bank has to keep certain minimum cash reserves with RBI to the needs of securing the monetary stability in the country. The Reserve Bank could prescribe CRR for scheduled bank between 3% and 20 % as per the demand.

    Question

    Which of the following is not correct in terms of CRR?

    a) CRR Controls Money Supply in Market

    b) CRR acts like a library deposit

    c) NBFCs are required to maintain CRR deposits with RBI.

    d) RBI do not pay interest on RBI deposits

    e) None of these

    Answer: d

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