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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 else can I help you with?
What is the current CRR declared by rbi?
the current CRR declare by RBI is 6%.2011
How much CRR is there at present?
4.75
What is the current CRR and SLR in Bangladesh in 2013?
In 2013, the CRR in Bangladesh was 4%. In the same year, the SLR for Bangladesh was set at 23%.
What is the current CRR and Repo rate?
As per the third quarter review monetary policy on January 29, 2010, RBI hiked the CRR by 75 basis points to 5.75%.
What is negative carry on CRR and SLR?
Negative carry on CRR and SLR balances arises because the return on CRR balances is nil, while the return on SLR balances (proxied using the 364-day Treasury Bill rate) is lower than the cost of deposits. Negative carry on CRR and SLR is arrived at in three steps. In the first step, return on SLR investment was calculated using 364-day Treasury Bills. In the second step, effective cost was calculated by taking the ratio (expressed as a percentage) of cost of deposits (adjusted for return on SLR investment) and deployable deposits (total deposits less the deposits locked as CRR and SLR balances). In the third step, negative carry cost on SLR and CRR was arrived at by taking the difference between the effective cost and the cost of deposits.
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 do you meant by Crr in banking terms?
CRR means Cash Reserve Ratio.
What is the current CRR declared by rbi?
the current CRR declare by RBI is 6%.2011
What is CRR rate by RBI 2010?
The CRR rate is 3% to 15% fixed by RBI.
Minimum CRR LIMIT?
there is no minimum limit of CRR in India but the maximum limit is 15%
What is the current CRR and SLR rate of Bangladesh for 2012?
crr=6% slr=19%
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 current CRR in INDIA?
Cash reserve ratio...This is stipulated % of deposits that the bank has to maintain in Cash with RBI.Current CRR =5.5%
What is CRR rate by RBI of India?
the Repo rate, Reserve repo rate and CRR as of 03 January 2009 are as follows: Repo Rate: 5.6% CRR: 5% Reverse Repo rate: 4.1% Source: RBI
What is the cureent CRR?
20% 20%
Is CRR is included in SLR?
yes
