What is the current Cash Reserve Ratio?

Question

Question

This question was previously asked in

JKSSB SI Official Paper (Held On: 11 Dec 2022 Shift 1)

Answer 1

The correct answer is 4%.

Key Points

The Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.
CRR is a tool used by the Reserve Bank of India (RBI) to control liquidity in the banking system.
An increase in CRR means banks have less to lend, which helps in controlling inflation.
A decrease in CRR means banks have more to lend, which helps in boosting economic growth.
As of the latest update, the current CRR is 4.5%.

Additional Information

Cash Reserve Ratio (CRR)
- Function: CRR is an important monetary policy tool used by the RBI to regulate money supply and control inflation.
- Impact: Changes in CRR directly impact the amount of funds available with banks for lending.
- Regulation: It ensures that a portion of bank deposits is kept safe and is not used for risky investments.