Question:
In the context of Indian banking and monetary policy, what does the abbreviation 'CRR' stand for?
In the context of Indian banking and monetary policy, what does the abbreviation 'CRR' stand for?
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Do not confuse CRR with SLR. CRR (Cash Reserve Ratio) is maintained in cash with the RBI, whereas SLR (Statutory Liquidity Ratio) is maintained by the banks themselves in liquid assets like gold or govt securities.
Updated On: Jul 5, 2026
- Cash Reserve Ratio
- Currency Return Rate
- Capital Reserve Ratio
- Credit Review Rate
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The Correct Option is A
Solution and Explanation
Step 1: Understanding the Question:
The question asks for the expansion of the acronym 'CRR', a common term used in the banking sector and monetary policy of India.
Step 2: Detailed Explanation:
In the Indian banking system, CRR stands for Cash Reserve Ratio.
It is a specified minimum fraction of the total deposits of customers that commercial banks are required to hold as reserves either in cash or as deposits with the central bank (Reserve Bank of India, RBI).
The RBI uses the CRR as a monetary policy tool to control the liquidity in the banking system and, subsequently, manage inflation and money supply in the economy.
Step 3: Final Answer:
The correct choice is (A).
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