RBI1 min read
Cash Reserve Ratio
The mandatory percentage of a bank's net demand and time liabilities (NDTL) that must be maintained as cash reserves with the Reserve Bank of India. CRR does not earn interest for banks. Used as a monetary policy tool to control liquidity.
Last updated: 17 May 2026
Frequently Asked Questions (FAQs)🔗
Q1. What is Cash Reserve Ratio in Indian corporate law?▼
The mandatory percentage of a bank's net demand and time liabilities (NDTL) that must be maintained as cash reserves with the Reserve Bank of India. CRR does not earn interest for banks. Used as a monetary policy tool to control liquidity.
Q2. Why is Cash Reserve Ratio important for compliance?▼
Cash Reserve Ratio is governed by the Reserve Bank of India under applicable banking and monetary policy frameworks. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.
Q3. Who should know about Cash Reserve Ratio?▼
Cash Reserve Ratio is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with RBI regulatory matters in India.
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