Q. What is the main function of the Cash Reserve Ratio (CRR)?
Answer: A monetary policy tool setting minimum reserves for banks
Notes: The Cash Reserve Ratio (CRR) requires scheduled banks to hold a minimum percentage of net demand and time liabilities as reserves with the Reserve Bank of India. CRR is reviewed in monetary policy meetings conducted by the RBI. As of February 2024, the CRR is set at 4.50%. This tool is used to regulate banking system liquidity and influence inflation.
Question Source: 📚This question has been sourced from GKToday's "40000+ GK / General Studies MCQs for SSC & State PCS Exams" App Exclusive Course in GKToday Android Application which provides more than 40K General Knowledge and General Studies questions with explanations asked in all Competitive Exams of India. Download the app here.
📌 Question Number: 140 in 35. Money Markets & Monetary Policy in the above course in App.

This Question is Also Available in:

हिन्दीಕನ್ನಡ