The smaller the Cash Reserve Ratio, the scope for lending by banks is : (1) greater (2) smaller (3) weaker (4) lesser

The smaller the Cash Reserve Ratio, the scope for lending by banks is : (1) greater (2) smaller (3) weaker (4) lesser
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(1) greater Explanation: Cash Reserve Ratio is a regulation set by Central bank (RBI in India) which dictates the minimum amount (reserves) (hata commercial bank must be held to customer notes and deposits. A decrease in CRR will make it mandatory for the banks to hold a lesser proportion of (heir deposits in the form of deposits with the RBI.
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The smaller the Cash Reserve Ratio, the scope for lending by banks is : (1) greater (2) smaller (3) weaker (4) lesser

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Last Answer : greater

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The ratio of a bank's cash holdings to its total deposit liabilities is called the - (1) Variable Reserve Ratio (2) Cash Reserve Ratio (3) Statutory Liquidity Ratio (4) Minimum Reserve Ratio

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Last Answer : (2) Cash Reserve Ratio Explanation: Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the avail-able amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.

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A commercial bank law creates credit only if it has - (1) Cash in the vault (2) Excess reserves (3) Permission of Reserve Bank of India (4) (4) Cooperation of other banks

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If he Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should - (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

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