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What is the use of CRR?
CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks don't hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI) / currency chests, which is considered as equivlanet to holding cash with themselves.. This minimum ratio (that is the part of the total deposits to be held as cash) is stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. Thus, When a bank's deposits increase by Rs100, and if the cash reserve ratio is 9%, the banks will have to hold additional Rs 9 with RBI and Bank will be able to use only Rs 91 for investments and lending / credit purpose. Therefore, higher the ratio (i.e. CRR), the lower is the amount that banks will be able to use for lending and investment. This power of RBI to reduce the lendable amount by increasing the CRR, makes it an instrument in the hands of a central bank through which it can control the amount that banks lend. Thus, it is a tool used by RBI to control liquidity in the banking system.
What is the current CRR declared by rbi?
the current CRR declare by RBI is 6%.2011
What is the current Statutory liquidity requirement of Commercial bank in Bangladesh?
19.0 percent of their total demand and time liabilities on daily basis, inclusive of average 6.0 percent (at least 5.5 percent in any day) Cash Reserve Ratio (CRR) on biweeklybasis. The CRR is to be kept with the BB and the remainder as qualifying unencumbered assets, either in cash or in Government securities. The SLR for the banks operating under the Islamic Shariah is 11.5 percent (inclusive of average 6.0 percent CRR on bi-weekly basis and at least 5.5 percent in any day). The specialised banks are exempted from maintaining the SLR.
What is meaning of cash reserve ratio and its advantages and diadvantages?
.. IT IS COMPULSORY THAT EVERY SCHEDULED COMMERCIAL BANKS IN INDIA EXCEPT RURAL REGIONAL BANKS (RRB) HAVE TO MAINTAIN A CERTAIN PERCENTAGE OF FUNDS WITH RESERVE BANK OF INDIA WITH REFERENCE TO THEIR DEMAND AND TIME LIABLITIES (DTL) ACCORDING TO RBI ACT 1934 SEC 42(1) CRR IS MAINTAINED TO ENSURE SOLVENCY AND LIQUIDITY OF THE BANKS (SCB)SCHEDULED COMMERCIAL BANKS. WHAT IS DEMAND AND TIME LIABLITY ? DEMAND LIABLITY ARE THOSE LIABLITY WHICH ARE PAYABLE ON DEMAND :EXAMPLE- @SAVINGS BANK ACCOUNT @CURRENT DEPOSIT @UNCLAIMED DEPOSIT @MARGINS HELD AGAINST LC AND BG (LETTER OF CREDIT AND BANK GRANTEES) WHAT ARE TIME LIABILITIES? THOSE LIABILITIES WHICH ARE NOT PAYABLE ON DEMAND BUT ARE LIABLE AT A PARTICULAR POINT OF TIME .EXAMPLE :- @ FIXED DEPOSITS @CASH CERTIFICATE @ COMMUTATIVE AND RECURRING DEPOSIT @STAFF SECURITY DEPOSIT ADVANTAGES OF MAINTAINING CRR: 1) TO ENSURE LIQUIDITY AND SOLVENCY POSITION OF SCHEDULED COMMERCIAL BANKS 2) TO MONITOR AND REGULATE THE FLOW OF CREDIT GIVEN BY COMMERCIAL BANKS 3) TO ENSURE A STABLE FLOW OF CREDIT IN THE ECONOMY 4) WHEN RBI INCREASES CRR THE SCB RESTRICT THE FLOW OF CREDIT TO THE PUBLIC WHICH SUCKS THE MONEY FROM THE GENERAL PUBLIC 5) WHEN RBI DECREASES CRR THE SCB GRANT MORE CREDIT LOANS AND OTHER FACILITIES TO THE GENERAL PUBLIC WHICH INCREASE THE FLOW OF MONEY IN THE HANDS OF MANY DIS ADVANTAGES OF CRR : 1) AFFECTS INDUSTRIAL GROWTH ,WHEN COMMERCIL BANKS HAVE TO MAINTAIN HIGH RATE OF CRR WITH RBI THE RESTRICT THE CREDIT TO GENERAL PUBLIC WHO ARE NONE OTHER THAT BUSINESS DEVELOPERS ,ENTREPRENEURS AND OTHER INDUSTRIALISTS WHO SEEK PRE AND POST SHIPMENT FINANCE 2) REDUCES THE STANDARD OF LIVING OF PEOPLE WHEN CRR IS INCREASED 3)BANKS LOOSE THEIR VALUABLE CUSTOMERS WHEN THEY ARE IN A SITUATION NOT TO PROVIDE CREDIT TO GENERAL PUBLIC CONTACT FOR MORE anandshankarrajabbm@gmail.com
How much CRR is there at present?
4.75
Why the central banks are controlling the crr and rapo rate?
CRR - Refers to Cash Reserve Ratio CRR is nothing but the amount of cash the banks need to deposit with the central banks. This is to ensure that the banks do not lend out all the depositors money. This is used by the banks to meet their day to day cash requirements. For example if you deposit $1000 with ABC bank the bank would have to deposit $100 with the central bank (If CRR is 10%) It can lend only the remaining 90% of the money Repo Rate - The Rate of Interest at which the central banks lend money to its member banks is called Repo rate. CRR and Repo rate are two factors that can influence the cash liquidity in the country's economy and also other factors like inflation. The central banks aim is to ensure that there is enough liquidity in the economy to influence the country's growth and at the same time to ensure that the country's inflation is maintained at acceptable limits. If the CRR & Repo rate are increased then the amount of free cash at the bank's disposal comes down. The interest that the banks have to pay the central banks on their borrowings would go up. As a result of which the liquidity in the economy comes down. Lesser loans would be available and the spending power of the public would come down. If the CRR & Repo rate are decreased then the amount of free cash at the banks disposal goes up. Cash is available cheap for the banks. Hence they would lend freely to the public. Recently because of the subprime crisis, the central banks across the world have been cutting down the CRR and the Repo rate. This is to ensure that more money is available for the public to spend. This would in turn help the world economy stabilize after the beating it has taken because of this crisis...
What is ment by CRR in trading?
What is ment by CRR in trading?"
What is current CRR of Pakistan?
present CRR = 5.25 % SLR = 25.0 % These rates are subjected to change quarterly
What is the use of CRR?
CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks don't hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI) / currency chests, which is considered as equivlanet to holding cash with themselves.. This minimum ratio (that is the part of the total deposits to be held as cash) is stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. Thus, When a bank's deposits increase by Rs100, and if the cash reserve ratio is 9%, the banks will have to hold additional Rs 9 with RBI and Bank will be able to use only Rs 91 for investments and lending / credit purpose. Therefore, higher the ratio (i.e. CRR), the lower is the amount that banks will be able to use for lending and investment. This power of RBI to reduce the lendable amount by increasing the CRR, makes it an instrument in the hands of a central bank through which it can control the amount that banks lend. Thus, it is a tool used by RBI to control liquidity in the banking system.
What do you meant by Crr in banking terms?
CRR means Cash Reserve Ratio.
Minimum CRR LIMIT?
there is no minimum limit of CRR in India but the maximum limit is 15%
What is the current CRR declared by rbi?
the current CRR declare by RBI is 6%.2011
What is the current CRR and SLR rate of Bangladesh for 2012?
crr=6% slr=19%
What is CRR rate by RBI 2010?
The CRR rate is 3% to 15% fixed by RBI.
How does the central bank regulate money supply in an economy?
There is something called a CRR - Cash Reserve Ratio. It is the amount of money that the member banks have to keep deposited with the central bank for every rupee that they receive as a deposit. Lets say you deposit Rs. 1000/- in your account and the CRR is 10% then your bank must deposit Rs. 100/- with RBI and can lend the remaining 900 rupees only. When the central bank reduces the CRR the amount of money with the banks would increase which they would lend at reduced rates to the public which in turn would increase the money circulation.
What is the current CRR and SLR rate for 2011?
The present rate of CRR is 6% and SLR is 24%.Thank you.
What is the current Statutory liquidity requirement of Commercial bank in Bangladesh?
19.0 percent of their total demand and time liabilities on daily basis, inclusive of average 6.0 percent (at least 5.5 percent in any day) Cash Reserve Ratio (CRR) on biweeklybasis. The CRR is to be kept with the BB and the remainder as qualifying unencumbered assets, either in cash or in Government securities. The SLR for the banks operating under the Islamic Shariah is 11.5 percent (inclusive of average 6.0 percent CRR on bi-weekly basis and at least 5.5 percent in any day). The specialised banks are exempted from maintaining the SLR.
