The correct answer is C. Cash Reserve Ratio (CRR).
The Cash Reserve Ratio (CRR) is a measure of control of the Reserve Bank of India (RBI) over the Commercial Banks. It is a proportion of the total deposits and reserves of the commercial banks that is to be kept with the Central Bank (RBI) on liquid form.
The CRR is one of the tools used by the RBI to control the money supply in the economy. By increasing or decreasing the CRR, the RBI can control the amount of money that is available for lending by the commercial banks.
A higher CRR means that the commercial banks have less money available for lending. This can lead to a decrease in the money supply and a slowdown in economic activity. A lower CRR means that the commercial banks have more money available for lending. This can lead to an increase in the money supply and an acceleration in economic activity.
The CRR is set by the RBI and is reviewed periodically. The current CRR is 4%.
The other options are incorrect.
- Bank rate is the rate at which the RBI lends money to the commercial banks.
- Statutory Liquidity Ratio (SLR) is the minimum amount of liquid assets that commercial banks are required to hold as a percentage of their net demand and time liabilities.
- Mandatory deposit is a deposit that is required to be made by the commercial banks with the RBI.