CA Foundation Exam > CA Foundation Questions > CRR according to July 2013, was:a)4%b)7%c)10%...
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CRR according to July 2013, was:
- a)4%
- b)7%
- c)10%
- d)2%
Correct answer is option 'A'. Can you explain this answer?
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CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is opt...
In addition to the mandatory amount of 4.5% of common equity tier 1 capital requirement set out in the capital requirements regulation (CRR), all banks are required to hold a capital conservation buffer and a counter cyclical capital buffer, to ensure that they accumulate a sufficient capital base in prosperous times to.
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CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is opt...
CRR stands for Cash Reserve Ratio. It is the portion of total bank deposits that commercial banks are required to keep with the central bank as reserves. The central bank uses the CRR as a tool to control inflation and stabilize the economy.
Given that the question is asking for the CRR as of July 2013, the correct answer is option 'A', which states that the CRR was 4%.
Below is a detailed explanation of the answer:
What is Cash Reserve Ratio (CRR)?
- Cash Reserve Ratio (CRR) is the percentage of a bank's total deposits that it must hold as reserves in the form of cash with the central bank.
- It is a monetary policy tool used by the central bank to regulate the money supply in the economy.
Importance of CRR
- CRR plays a crucial role in controlling inflation and managing liquidity in the banking system.
- By increasing the CRR, the central bank reduces the liquidity in the system, thereby reducing the amount of money available for lending and spending, which helps control inflation.
- On the other hand, by decreasing the CRR, the central bank increases the liquidity in the system, making more money available for lending and spending, which stimulates economic growth.
CRR as of July 2013
- According to the question, as of July 2013, the CRR was 4%.
- This means that banks were required to keep 4% of their total deposits with the central bank as reserves in the form of cash.
- The remaining 96% of the deposits could be utilized by the banks for lending and investment purposes.
Impact of CRR on the Economy
- The CRR has a direct impact on the liquidity in the banking system.
- A higher CRR reduces the amount of money available for lending, which can lead to a decrease in credit growth and economic activity.
- Conversely, a lower CRR increases the amount of money available for lending, which can stimulate credit growth and economic activity.
Conclusion
To summarize, the correct answer to the question is option 'A', which states that the CRR as of July 2013 was 4%. The CRR is an important monetary policy tool used by the central bank to control inflation and manage liquidity in the banking system. By adjusting the CRR, the central bank can influence the amount of money available for lending and spending in the economy.
Given that the question is asking for the CRR as of July 2013, the correct answer is option 'A', which states that the CRR was 4%.
Below is a detailed explanation of the answer:
What is Cash Reserve Ratio (CRR)?
- Cash Reserve Ratio (CRR) is the percentage of a bank's total deposits that it must hold as reserves in the form of cash with the central bank.
- It is a monetary policy tool used by the central bank to regulate the money supply in the economy.
Importance of CRR
- CRR plays a crucial role in controlling inflation and managing liquidity in the banking system.
- By increasing the CRR, the central bank reduces the liquidity in the system, thereby reducing the amount of money available for lending and spending, which helps control inflation.
- On the other hand, by decreasing the CRR, the central bank increases the liquidity in the system, making more money available for lending and spending, which stimulates economic growth.
CRR as of July 2013
- According to the question, as of July 2013, the CRR was 4%.
- This means that banks were required to keep 4% of their total deposits with the central bank as reserves in the form of cash.
- The remaining 96% of the deposits could be utilized by the banks for lending and investment purposes.
Impact of CRR on the Economy
- The CRR has a direct impact on the liquidity in the banking system.
- A higher CRR reduces the amount of money available for lending, which can lead to a decrease in credit growth and economic activity.
- Conversely, a lower CRR increases the amount of money available for lending, which can stimulate credit growth and economic activity.
Conclusion
To summarize, the correct answer to the question is option 'A', which states that the CRR as of July 2013 was 4%. The CRR is an important monetary policy tool used by the central bank to control inflation and manage liquidity in the banking system. By adjusting the CRR, the central bank can influence the amount of money available for lending and spending in the economy.
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CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is option 'A'. Can you explain this answer?
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CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is option 'A'. Can you explain this answer?.
CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for CRR according to July 2013, was:a)4%b)7%c)10%d)2%Correct answer is option 'A'. Can you explain this answer?.
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