With whom is the Cash Reserve Ratio (CRR) kept?

Correct option is A

The correct answer is: (a) Reserve Bank of India

Explanation:

• The Cash Reserve Ratio (CRR) is the percentage of a commercial bank's total deposits that it must keep in the form of reserves, either in cash or with the Reserve Bank of India (RBI).

• The RBI determines and regulates the CRR to control the liquidity and credit creation in the economy, making it an essential tool for monetary policy.

Information Booster:
• CRR is used to control inflation and ensure stability in the financial system.
• The CRR is kept with the RBI in the form of liquid cash.
• It is a part of the Statutory Liquidity Ratio (SLR), which mandates the maintenance of certain reserves by commercial banks.
• Changes in the CRR influence the lending capacity of banks, thus impacting the money supply.
• The CRR is reviewed periodically by the RBI as part of the monetary policy.