WBCS.LIVE practice question

What does 'CRR' stand for in the banking regulations of the Reserve Bank of India?

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

Answer options

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

Correct answer and explanation

Correct answer: Cash Reserve Ratio

Explanation: āœ… Correct Answer: B) Cash Reserve Ratio šŸ“š Explanation: Cash Reserve Ratio (CRR) is a specific percentage of a bank's total deposits that it must maintain with the RBI in the form of liquid cash. Banks do not earn any interest on this amount kept with the central bank. By changing the CRR, the RBI can control the amount of money banks have available for lending, thereby managing inflation and liquidity.