What are the disadvantages of CRR?
Answer (1)
21st Nov, 2022
Below are the disadvantages of the cash reserve ratio:
• Frequent changes in CRR can adversely affect a healthy economic environment.
• It is the amount deposited in the current account of the central bank. Hence, banks do not earn any interest for the same, nor do they get the inflation portion.
• Reduces the bank's credit capacity and prevents it from maximizing profit.
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