how much percentage of Bank deposit is kept as cash reserve for daily transaction in Indian Bank
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15% of Bank deposit is kept ad cash reserve for daily transaction in Indian bank
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According to CRR, 4% of the Bank deposit is kept as cash reserve for daily transactions in Indian bank.
Explanation:
- Cash Reserve Ratio suggests that Indian banks should require possessing a specific proportion of money deposits in the form of cash.
- But, these banks did not possess cash with themselves; instead they would be depositing the cash with RBI as currency chests.
- These currency chests can be considered as similar to holding the cash. This minimum ratio can be stimulated and is known as CRR.
- It is also said that, the higher this ration, then lesser amount should be used for further investment or lending.
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