JKSSB Mock Tests

What is the Cash Reserve Ratio (CRR) in the context of Indian banking?

A. It's the interest rate at which banks borrow from the central bank
B. It's the percentage of deposits that banks must keep in liquid form in the short term
C. It's the ratio of a bank's capital to its total assets
D. It's the ratio of government bonds to total assets held by a bank
Answer: Option B
Solution (By JKSSB Mock Tests Team)
The Cash Reserve Ratio (CRR) is a highly critical monetary policy tool powerfully used by the Reserve Bank of India, mathematically defined as the minimum percentage of a commercial bank's total deposits that strictly must be held as liquid cash reserves.
This Question Belongs to: General knowledge mcqs Economics set 2

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