Question

In the context of Indian banking and monetary policy, what does the abbreviation 'CRR' stand for?

• A. Cash Reserve Ratio
• B. Currency Return Rate
• C. Capital Reserve Ratio
• D. Credit Review Rate

Hint:

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.

Answer 1

The Correct Option is A

Step 1: Understanding the Question:
We need to identify the full form of the abbreviation 'CRR', a key term in Indian banking and monetary policy.


Step 2: Detailed Explanation:
Within the Indian financial framework, CRR expands to Cash Reserve Ratio.
This refers to the mandatory minimum percentage of a commercial bank's total customer deposits that must be kept as reserves in cash with the central bank, the Reserve Bank of India (RBI).
The RBI utilizes the CRR as a primary monetary policy instrument to regulate systemic liquidity, thereby helping to control inflation and manage the overall money supply.


Step 3: Final Answer:
The correct choice is (A).