Question

Give reasons :-
1.cash reserve ratio affect the lending capacity of banks ?
2. rate of interest on fixed deposit is high ?​

Answer 1

Answer:

Cash Reserve Ratio is one of the weapon of credit control used by Central Bank. ... (f) It directly affects the lending capacity of banks and therate of interest charged by banks. (g) An increase in cash reserve ratio leads to contraction of credit and lending capacity of commercial banks.

Answer 2

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