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Which statement best explains Cash Reserve Ratio?

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Question ID #27352 UPSC UPSC EPFO APFC 2026 Mock Test Series UPSC EPFO APFC 2026 Full-Length Mock Test 8 Medium

Which statement best explains Cash Reserve Ratio?

Correct Answer: B. Share of a bank's net demand and time liabilities maintained as cash balance with RBI
Cash Reserve Ratio: Share of a bank's net demand and time liabilities maintained as cash balance with RBI

Question: Which statement best explains Cash Reserve Ratio?

A. Destination-based indirect tax on supply of goods and services with input-tax-credit mechanism

B. Share of a bank's net demand and time liabilities maintained as cash balance with RBI

C. Sustained rise in the general price level

D. Rate at which RBI lends short-term funds to banks against eligible collateral under the liquidity framework

Correct Answer: B. Share of a bank's net demand and time liabilities maintained as cash balance with RBICash Reserve Ratio: Share of a bank's net demand and time liabilities maintained as cash balance with RBI

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Which statement best explains Cash Reserve Ratio? - MCQ Explanation

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Correct answer: B. Share of a bank's net demand and time liabilities maintained as cash balance with RBI