The reason why RBI does not pay interest on CRR balances kept by the commercial banks is covered in the following points:
👉 Should the CRR be abolished?
👉 Why is the CRR so important?
👉 Why did RBI use to pay interest on CRR?
👉 Why did they finally stop?

CRR or Cash Reserve Ratio is one of the 2 important Reserve Ratios used by the RBI. The other one is SLR or Statutory Liquidity Ratio. Interest can be earned on SLR but not on CRR. In this video you will learn why this is the case. I will also discuss the relationship between CRR, SLR and LCR (which was introduced by the Basel Norms). You will be surprised to know that the RBI used to pay interest on CRR a long time ago. So why did they stop? Watch the video to find out. This video is a continuation of the Money series and has lots of concepts from banking and economics. RBI Grade B aspirants will definitely find this to be super useful.


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