Cash Reserve Ratio Calculator

CRR Formula:

\[ CRR = \frac{\text{Cash Reserves}}{\text{Net Demand and Time Liabilities}} \]

Cash Reserve Ratio (CRR):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is Cash Reserve Ratio?

The Cash Reserve Ratio (CRR) is the percentage of a bank's total deposits that must be maintained with the central bank in the form of liquid cash. It's a monetary policy tool used to control money supply in the economy.

2. How Does the Calculator Work?

The calculator uses the CRR formula:

\[ CRR = \frac{\text{Cash Reserves}}{\text{Net Demand and Time Liabilities}} \times 100 \]

Where:

Cash Reserves — Amount maintained with central bank (INR)
Net Demand and Time Liabilities — Bank's total deposits (INR)

Explanation: The ratio shows what percentage of deposits banks must keep as reserves.

3. Importance of CRR Calculation

Details: CRR helps central banks control inflation, ensure banking system stability, and regulate money supply in the economy.

4. Using the Calculator

Tips: Enter cash reserves and liabilities in INR. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the current CRR in India?
A: As of 2023, the CRR in India is 4.5% of net demand and time liabilities (NDTL).

Q2: How often is CRR calculated?
A: Banks must maintain CRR on a fortnightly basis, calculated as a percentage of their NDTL.

Q3: What happens if a bank fails to maintain CRR?
A: Banks may have to pay penalty interest on the shortfall at 3% above the bank rate.

Q4: What's the difference between CRR and SLR?
A: CRR is kept as cash with RBI, while SLR (Statutory Liquidity Ratio) is maintained in liquid assets like gold and government securities.

Q5: Can CRR be changed?
A: Yes, central banks periodically adjust CRR as part of monetary policy to control money supply.