As of October 2024, the cash reserve ratio (CRR) in India is _____________. 

The correct answer is 0.045.

Key Points

• The Cash Reserve Ratio (CRR) is a monetary policy tool used by the Reserve Bank of India (RBI) to control liquidity in the banking system.
• As of October 2024, the CRR in India is set at 4.5%.
• CRR is the percentage of a bank's total deposits that must be maintained as reserves with the RBI.
• Changes in the CRR impact the lending capacity of banks and influence overall economic activity.
• The primary purpose of CRR is to ensure liquidity and stability in the banking system.

Additional Information

• Statutory Liquidity Ratio (SLR)
  • SLR is the percentage of a bank's total deposits that must be maintained in the form of liquid assets such as cash, gold, or government securities.
  • As of October 2024, the SLR is 18%.
  • SLR is used to regulate the credit growth in the economy and ensure that banks have sufficient liquidity to meet customer demands.
• Repo Rate
  • The Repo Rate is the rate at which the RBI lends money to commercial banks in the event of any shortfall of funds.
  • As of October 2024, the Repo Rate is 6.5%.
  • Changes in the Repo Rate affect the interest rates on loans and deposits in the economy.
• Reverse Repo Rate
  • The Reverse Repo Rate is the rate at which the RBI borrows money from commercial banks.
  • It is used to control the money supply in the economy.
  • As of October 2024, the Reverse Repo Rate is 3.35%.
• Monetary Policy Committee (MPC)
  • The MPC is responsible for fixing the benchmark interest rates in India.
  • It consists of six members - three from the RBI and three appointed by the Government of India.
  • The primary objective of the MPC is to maintain price stability while keeping in mind the objective of growth.