Consider the following statements about the banking system in India:
1. Scheduled banks are required to maintain the Cash Reserve Ratio (CRR) with themselves.
2. Non-scheduled banks are required to maintain the Cash Reserve Ratio (CRR) with the Reserve Bank of India.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Question

Consider the following statements about the banking system in India:
1. Scheduled banks are required to maintain the Cash Reserve Ratio (CRR) with themselves.
2. Non-scheduled banks are required to maintain the Cash Reserve Ratio (CRR) with the Reserve Bank of India.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

ONLiNE UPSC · Accepted Answer

Cash Reserve Ratio (CRR) is the minimum percentage of a bank's total Net Demand and Time Liabilities (NDTL) that it is required to maintain as reserves with the Reserve Bank of India (RBI) in the form of cash.

Statement 1 is not correct: Scheduled banks are required to maintain Cash Reserve Ratio (CRR) with the Reserve Bank of India (RBI), not with themselves. This is a statutory requirement as per the RBI Act.

Statement 2 is not correct: Non-scheduled banks are governed by Section 56 of the RBI Act .They are required to maintain a certain percentage of their net demand and time liabilities as cash reserves, but with themselves or in any other approved manner, not necessarily with RBI.

Banking System in India

Cash Reserve Ratio (CRR)

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M Question 1	⏱ 0
Consider the following statements about the banking system in India: 1. Scheduled banks are required to maintain the Cash Reserve Ratio (CRR) with themselves. 2. Non-scheduled banks are required to maintain the Cash Reserve Ratio (CRR) with the Reserve Bank of India. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

Banking System in India

Cash Reserve Ratio (CRR)

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