Question
Download Solution PDFWhich among the following statements is incorrect?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is Lower the Cash Reserve Ratio (CRR), lower will be the liquidity in the system.Key Points
- A lower Cash Reserve Ratio (CRR) will actually increase the liquidity in the system, as banks will have more funds available to lend.
- The Cash Reserve Ratio (CRR) is the percentage of deposits that banks are required to maintain with the central bank as a reserve.
- A higher CRR means banks have less funds available to lend, reducing liquidity in the system.
Additional Information
- The Statutory Liquidity Ratio (SLR) is the percentage of deposits that banks are required to maintain in the form of liquid assets such as government securities.
- A lower SLR means banks have more funds available to lend, increasing liquidity in the system.
- An increase in bank rate, which is the rate at which the central bank lends to commercial banks, makes borrowing more expensive for banks, reducing their ability to lend and decreasing the money supply.
- A higher CRR means banks have less funds available to lend, reducing liquidity in the system.
- A lower SLR means banks have more funds available to lend, increasing liquidity in the system.
Last updated on Jul 5, 2025
-> As per the notice published on 30th June 2025, the Staff Selection Commission has announced an extension for the application form correction window. Candidates can now make the required changes in their applications until 1st July 2025.
-> SSC MTS Notification 2025 has been released by the Staff Selection Commission (SSC) on the official website on 26th June, 2025.
-> For SSC MTS Vacancy 2025, a total of 1075 Vacancies have been announced for the post of Havaldar in CBIC and CBN.
-> As per the SSC MTS Notification 2025, the last date to apply online will be 24th July 2025 as per the SSC Exam Calendar 2025-26.
-> The selection of the candidates for the post of SSC MTS is based on Computer Based Examination.
-> Candidates with basic eligibility criteria of the 10th class were eligible to appear for the examination.
-> Candidates must attempt the SSC MTS Mock tests and SSC MTS Previous year papers for preparation.