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NDA 2019 GAT · General Knowledge · Indian Economy · medium

The Cash Reserve Ratio (CRR) is the percentage of a bank's deposits that it must:

Single correct option

The Cash Reserve Ratio (CRR) is the percentage of a bank's deposits that it must:
  1. A. Lend to priority sectors
  2. B. Invest in government securities
  3. C. Hold in its own vaults as gold
  4. D. Keep as cash balance with the Reserve Bank of India
Show answer and solution

Answer: (D) Keep as cash balance with the Reserve Bank of India

CRR is the share of net demand and time liabilities that scheduled banks must maintain as cash with the RBI, and the RBI uses it to control liquidity. Holding government securities refers to the Statutory Liquidity Ratio, while lending to priority sectors is a separate target.
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Original question written in the NDA 2019 GAT pattern and checked twice for the correct answer. Not an official question paper. How we write and check questions · Corrections policy · Report a mistake