....Where does the CRR fit into all this? While loans are not directly linked to CRR, changes in the ration may impact interest rates. When the CRR is raised, banks have to increase the funds they keep with the RBI. As the CRR earns no interest, banks may have to recoup costs through other lending. They may also have a lower amount available to lend. This may result in interest rates going up. Remember, a CRR change does not always warrant a change in a bank’s base rate.....
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