What is a Contractionary Policy?

Contractionary Policy refers to the monetary policy which aims to slow down the economy by introducing a reduction in money supply for lesser money and investment. There are many economic tools used by the Central Bank of every nation like CRR, SLR, Repo, Reverse Repo, Interest Rate etc. to keep a check on the volume

What is the meaning of Cash Reserve Ratio?

Cash Reserve Ratio is a specific amount of funds which the commercial banks have to keep with the Reserve Bank of India to ensure liquidity in the system. The funds are a part of the Net Demand and Time Liabilities (NDTL). A reduction in CRR leads to more liquidity in the system as the banks

What is Bank Rate?

Bank Rate is defined as the rate at which Central Bank gives loans to other domestic banks like commercial banks, cooperative banks, development banks etc. The loans are generally given on a short-term basis. It is the way the Central Bank manages the economic activity in the country. The Bank Rate, in turn, goes to

Cash Reserve Ratio

The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with Reserve bank of India as a portion of their Net Demand and Time Liabilities (NDTL). The objective of CRR is to ensure the liquidity and solvency of the Banks. The CRR is maintained fortnightly average basis. Impacts of