Cash Reserve Ratio (CRR)

byPaytm Editorial TeamLast Updated: November 14, 2025

Definition

The Cash Reserve Ratio is the percentage of a bank’s total deposits that must be kept as cash with the Reserve Bank of India (RBI).

Purpose

CRR ensures banks always maintain enough liquidity to meet withdrawal demands and control money flow in the economy.

Example

If CRR is 4%, a bank with ₹100 crore in deposits must keep ₹4 crore with RBI.

Author

Paytm Editorial Team

The Paytm Editorial Team is a collaborative group of writers, editors, and industry experts. We're dedicated to bringing you the latest insights, news, and guides on digital payments, financial services, and the technology that's shaping India's economy. We offer easy-to-follow guides and insights to help you explore Paytm’s products, features, and services. Our goal is to provide clear, reliable, and helpful information to empower you on your financial journey.