Multiple choice

As per the reports in the financial news papers the RBI, w.e.f. February 2007, has decided to pay some interest on the 'Cash reserve deposits' kept with it by various banks. What will be the rate of interest on such deposits?

  1. 0·5%

  2. 0·75%

  3. 1%

  4. 1·25%
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A Correct answer
Explanation

In February 2007, the RBI decided to pay interest on Cash Reserve Ratio (CRR) balances held by banks at a rate of 0.5 percent, providing some relief to the banking sector.

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