The Cash Reserve Ratio refers to?
Cash reserve Ratio (CRR) is the share of Net Demand and Time Liabilities that the banks have to hold as liquid assets. Cash Reserve Ratio (CRR) is a specific portion of the total deposit that is held as a reserve by the commercial banks and is mandated by the RBI (Reserve Bank of India). This particular amount is held as a reserve in the form of cash or as a cash equivalent which is stored in the bank’s vault or is sent to the RBI. Cash Reserve Ratio in the case of India is decided by the MPC (Monetary Policy Committee) under the periodic Monetary and Credit Policy.
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