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The ratio of a bank’s cash holdings to its total deposit liabilities is called the
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- Variable Reserve Ratio
- Cash Reserve Ratio
- Statutory Liquidity Ratio
- Minimum Reserve Ratio
- Variable Reserve Ratio
Correct Option: B
Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.
