The Cash Reserve Ratio (CRR) is the share of a bank's net demand and time liabilities that the bank must keep as:
A. gold in its own vaults
B. government securities
C. loans to priority sectors
D. a cash balance with the RBI
A. gold in its own vaults
B. government securities
C. loans to priority sectors
D. a cash balance with the RBI
Best answer
Answer: D. a cash balance with the RBI
Answer: (D) a cash balance with the RBI
Under CRR, banks keep a set share of their deposits as cash with the Reserve Bank of India and earn no interest on it. Keeping liquid assets such as government securities and gold is the Statutory Liquidity Ratio (SLR).
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