CRR means Cash Reserve Ratio which defines the type of condition which is imposed on all the banks of India and this condition is imposed by the Central bank of India i.e. RBI (Reserve bank of India). All the banks of India have to deposit a certain proportion of their total deposits in the form of cash and they all have deposit it in RBI. So RBI imposes some conditions on it which is called as CRR. Currently the CRR is 4 percent in India. For example, if any bank deposit Rs.100 in RBI and CRR is 4 percent, then that particular bank will hold additional Rs.4 with RBI and now that bank will be able to use Rs. 96 only out of 100 for lending and investment purpose.
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CRR means Cash Reserve Ratio which defines the type of condition which is imposed on all the banks of India and this condition is imposed by the Central bank of India i.e. RBI (Reserve bank of India). All the banks of India have to deposit a certain proportion of their total deposits in the form of cash and they all have deposit it in RBI. So RBI imposes some conditions on it which is called as CRR. Currently the CRR is 4 percent in India. For example, if any bank deposit Rs.100 in RBI and CRR is 4 percent, then that particular bank will hold additional Rs.4 with RBI and now that bank will be able to use Rs. 96 only out of 100 for lending and investment purpose.