OMTEX CLASSES: Cash reserve ratio is a quantitative measure of credit control.

Cash reserve ratio is a quantitative measure of credit control.

I do agree with the statement.

Reason: Credit control measures refer to those measures adopted by RBI to increase or decrease the credit or money supply in the economy. If there is more money supply, it will lead to inflation, and therefore, RBI will adopt credit control measures to restrict money supply.

Cash Reserve Ratio: -The CRR also affects money supply in the economy. It is the ratio or percentage of a bank’s (demand and term) deposits to be kept in reserve with RBI. Increase in CRR reduces the cash for lending, and a low CRR increases the cash for lending by banks. The CRR was 15% in 1991. Subsequently CRR was reduced. In April 2010, CRR was revised at 6%.