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Cash Reserve Ratio (CRR)

Introduction

Cash Reserve Ratio (CRR) banking system में liquidity को control करने के लिए इस्तेमाल किया जाने वाला एक प्रमुख monetary policy tool है। यह सीधे तौर पर इस बात को प्रभावित करता है कि banks जनता को कितना पैसा lend कर सकते हैं।

Banking exams में CRR से जुड़े questions बहुत common होते हैं क्योंकि ये direct, factual और high-scoring होते हैं।

Pattern: Cash Reserve Ratio (CRR)

Pattern

Cash Reserve Ratio bank के total deposits का वह percentage है जिसे cash के रूप में Reserve Bank of India के पास रखना अनिवार्य होता है।

Step-by-Step Example

Question

Cash Reserve Ratio (CRR) बढ़ने का तुरंत क्या प्रभाव पड़ता है?

Options:

  • A. Banks की lending capacity बढ़ जाती है
  • B. Banks की lending capacity घट जाती है
  • C. Money supply बढ़ जाती है
  • D. Bank profitability बढ़ जाती है

Solution

  1. Step 1: CRR का मतलब समझें

    CRR deposits का वह हिस्सा है जिसे banks को RBI के पास रखना होता है और जिसे lending के लिए use नहीं किया जा सकता।

  2. Step 2: CRR बढ़ने का effect analyse करें

    जब CRR बढ़ता है, तो banks को ज़्यादा funds RBI के पास रखने पड़ते हैं।

  3. Step 3: CRR को lending capacity से जोड़ें

    कम पैसा available होने से banks की lending ability घट जाती है।

  4. Final Answer:

    Banks की lending capacity घट जाती है → Option B

  5. Quick Check:

    CRR ↑ → RBI के पास funds ↑ → Lending ↓ ✅

Quick Variations

• CRR केवल cash form में maintain किया जाता है।

• Banks को CRR balances पर कोई interest नहीं मिलता।

• Higher CRR liquidity कम करता है; lower CRR liquidity बढ़ाता है।

Trick to Always Use

  • Step 1 → CRR = RBI के पास रखा गया cash
  • Step 2 → CRR ↑ = lending power ↓
  • Step 3 → CRR ↓ = lending power ↑

Summary

Summary

  • Cash Reserve Ratio deposits का वह percentage है जो RBI के पास रखा जाता है।
  • CRR सीधे तौर पर banks की lending capacity को प्रभावित करता है।
  • Banks को CRR balances पर कोई interest नहीं मिलता।
  • CRR का उपयोग liquidity और inflation को control करने के लिए किया जाता है।

याद रखने का example:
RBI के पास ज़्यादा cash lock → Lending के लिए कम पैसा → CRR

Practice

(1/5)
1. Cash Reserve Ratio (CRR) is maintained by banks in which form?
easy
A. Cash with the central bank
B. Government securities with RBI
C. Cash with the bank branches
D. Fixed deposits with RBI

Solution

  1. Step 1: Recall the definition of CRR

    CRR is a mandatory reserve requirement.

  2. Step 2: Identify the form of reserve

    It must be kept strictly in cash with the central bank.

  3. Final Answer:

    Cash with the central bank → Option A

  4. Quick Check:

    CRR = cash parked with RBI only ✅
Hint: CRR always means cash with RBI.
Common Mistakes: Confusing CRR with SLR securities.
2. If CRR is reduced by RBI, which of the following is the most likely outcome?
easy
A. Decrease in money supply
B. Increase in banks’ lending capacity
C. Increase in cash locked with RBI
D. Immediate rise in inflation rate

Solution

  1. Step 1: Understand CRR reduction

    Lower CRR frees up funds for banks.

  2. Step 2: Link free funds with lending

    More available funds increase lending capacity.

  3. Final Answer:

    Increase in banks’ lending capacity → Option B

  4. Quick Check:

    CRR ↓ → Funds free → Lending ↑ ✅
Hint: CRR cut = more money to lend.
Common Mistakes: Assuming CRR cut immediately raises inflation.
3. Banks earn interest on the amount kept under Cash Reserve Ratio because:
easy
A. CRR funds are invested by RBI
B. CRR is treated as bank deposits
C. Banks do not earn any interest on CRR balances
D. CRR earns interest at repo rate

Solution

  1. Step 1: Recall the nature of CRR

    CRR is a compulsory reserve.

  2. Step 2: Identify interest treatment

    Banks earn no interest on CRR balances.

  3. Final Answer:

    Banks do not earn any interest on CRR balances → Option C

  4. Quick Check:

    CRR = zero return for banks ✅
Hint: CRR earns zero interest.
Common Mistakes: Linking CRR returns with repo rate.
4. Which authority decides the Cash Reserve Ratio in India?
medium
A. Reserve Bank of India
B. Ministry of Finance
C. Parliament of India
D. Commercial Banks

Solution

  1. Step 1: Identify the monetary authority

    CRR is a monetary policy instrument.

  2. Step 2: Link monetary tools with authority

    Such tools are decided by the central bank.

  3. Final Answer:

    Reserve Bank of India → Option A

  4. Quick Check:

    CRR decisions = RBI authority ✅
Hint: All reserve ratios are fixed by RBI.
Common Mistakes: Assuming government fixes CRR.
5. Which of the following best explains how CRR helps RBI control inflation?
medium
A. By increasing bank profits
B. By fixing lending rates directly
C. By encouraging banks to borrow more
D. By reducing excess liquidity in the system

Solution

  1. Step 1: Identify the inflation problem

    High inflation is often driven by excess liquidity.

  2. Step 2: Link CRR with liquidity

    Higher CRR locks more funds with RBI.

  3. Final Answer:

    By reducing excess liquidity in the system → Option D

  4. Quick Check:

    CRR ↑ → Liquidity ↓ → Inflation control ✅
Hint: CRR absorbs excess money.
Common Mistakes: Assuming CRR directly fixes prices.

Mock Test

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