CRR (Cash Reserve Ratio): Cash reserve Ratio (CRR) is the amount of funds that the banks have

to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks. For Example: if you deposit Rs 100 in your bank, then bank can't use the entire Rs 100 for lending or investment purpose. They have to maintain a certain percentage of their deposits in the form of cash and can use only the remaining amount for lending/investment. This minimum percentage which is determined by the central bank is known as Cash Reserve Ratio. It means when a bank's deposits increase by Rs 100, and if the cash reserve ratio is 9%, the banks will have to hold additional Rs 9 with RBI and Bank will be able to use only Rs 91 for investments and lending or credit purpose. Open Market Operations: OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis. When the RBI feels there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity. Similarly, when the liquidity conditions are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market. For Example: Government may issue government bonds, buy foreign currencies, etc. Statutory Liquidity Ratio: The amount that the commercial banks require to maintain in the form of cash, or gold or govt. approved securities before providing credit to the customers. OR Its the percentage of Demand and Time Maturities that banks need to have in any or combination of the following forms: o Cash o Gold valued at a price not exceeding the current market price, o Approved securities (bond and shares of different companies). Time Liabilities refer to the liabilities, which the commercial banks are liable to pay to the customers on there anytime demand. SLR is determined and maintained by the Reserve Bank of India. The maximum limit of SLR is 40% and minimum limit of SLR is 24%. Its 24% now. This restriction is imposed by RBI on banks to make funds available to customers on demand as soon as possible. Current Rate: 24% Monetary Policy: The process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. Monetary operations involve monetary techniques which operate on monetary magnitudes such as money supply, interest rates and availability of credit aimed to maintain Price Stability, Stable exchange rate, Healthy Balance of Payment, Financial stability, Economic growth. RBI monitors and regulates the monetary policy of the country stabilizes the price by controlling Inflation.

Capital: A factor of production that is not wanted for itself but for its ability to help in
producing other goods. 1. Financial assets or the financial value of assets, such as cash. 2. The factories, machinery and equipment owned by a business.

Wages Salary Savings Demand Supply Value in Exchange Value in Use Development Growth