What do you mean by CRR?
CRR means Cash Reserve Ratio. In India, the commercial banks are in a position to keep compulsorily certain portion of cash with the central bank namely Reserve Bank of India.
At present CRR is 4 %
They have to keep cash at 4% of their net demand and time liabilities with RBI and for this purpose, the banks should keep cash with currency chests of RBI or their own currency chests and any amount that has been kept with currency chest is termed as cash with RBI
Non maintenance of CRR attracts penalty. CRR is calculated on daily basis and CRR can be fixed not less than three percent or not more than fifteen percent
For example ABC bank has total deposits to the tune of 1000000.00 crores, they have to keep cash worth 40000 crores with different currency chests and they have to provide the details on daily basis to RBI
