If the total deposit created by commercial banks is Rs 50000 crore and CRR
is 12% and SLR is 8%, then calculate the amount of initial deposit with the
bank.

Question

If the total deposit created by commercial banks is Rs 50000 crore
and CRR
is 12% and SLR is 8%, then calculate the amount of initial deposit
with the
bank

Arjita Bhadauria · Accepted Answer

Dear Student

LRR = CRR+SLR = 12% + 8%= 20%
Total deposit = Rs5000 cr
Money multiplier = 1/LRR = 1/ 20= 5
Initial deposit= total deposit/ money multiplier = 5000/5 =
RS1000 cr

so, the initial deposit is RS1000 cr

Regards

If the total deposit created by commercial banks is Rs 50000 crore and CRR is 12% and SLR is 8%, then calculate the amount of initial deposit with the bank.

If the total deposit created by commercial banks is Rs 50000 crore and CRR
is 12% and SLR is 8%, then calculate the amount of initial deposit with the
bank.