Which of the following best describes the effect of a cut in the Cash Reserve Ratio (CRR) by the RBI?

Subject: General Awareness | Topic: Indian Economy & Banking | Difficulty: MEDIUM

Options

1. (A) It reduces the funds banks can lend
2. (B) It increases the funds banks can lend
3. (C) It raises loan EMIs immediately
4. (D) It contracts the money supply

Verified Answer

Option (B): It increases the funds banks can lend

Practice complete mock tests for SSC, Banking & Railway exams at https://testx.in/questions/01a0bf51-cc39-7344-8aaf-6959493fc0f0/which-of-the-following-best-describes