Multiple choice

The portion of total deposits of a commercial bank, which it has to keep with RBI in the form of cash reserves, is termed as

  1. CRR

  2. SLR

  3. Bank Rate

  4. Repo Rate
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A Correct answer
Explanation

CRR (Cash Reserve Ratio) is the mandatory percentage of deposits that commercial banks must maintain with the RBI in cash form. This is a monetary policy tool used by RBI to control liquidity and inflation in the economy. SLR (Statutory Liquidity Ratio) is different - it requires banks to maintain specified liquid assets, not just cash with RBI.

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