WHAT IS CRR ?

CRR (Cash Reserve Ratio) is a percentage of a bank's deposits that must be kept in the form of cash with the central bank. The central bank uses the CRR as a tool to regulate the availability of money in the economy. By raising the CRR, the central bank can reduce the amount of money that banks have available to lend, which can help to curb inflation. Conversely, by lowering the CRR, the central bank can increase the amount of money that banks have available to lend, which can stimulate economic growth.

Banks are required to maintain a certain level of CRR as a percentage of their deposits, and they are not allowed to use this money for any other purpose. The CRR is usually determined by the central bank, and it is typically reviewed and adjusted on a regular basis in response to changing economic conditions.