WBCS.LIVE practice question

In the banking and monetary sector, what does the acronym 'CRR' stand for?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Cash Reserve Ratio
  2. Currency Regulation Rate
  3. Credit Return Ratio
  4. Central Reserve Rate

Correct answer and explanation

Correct answer: Cash Reserve Ratio

Explanation: āœ… Correct Answer: A) Cash Reserve Ratio šŸ“š Explanation: The Cash Reserve Ratio (CRR) is the minimum percentage of a bank's total deposits that it must strictly maintain as liquid cash with the Reserve Bank of India. It is a crucial monetary policy tool; increasing the CRR removes excess liquidity from the banking system, thereby helping to control inflation.