Banking, mapped
MapGlossary
The regulator's grip·2 of 4
  1. RBI & the repo rate→
  2. CRR (Cash Reserve Ratio)→
  3. SLR (Statutory Liquidity Ratio)→
  4. Rate transmission (repo → your EMI)

The regulator's grip

CRR: the money your bank must park at RBI, earning nothing

The slice of every deposit a bank must park at RBI as cash, earning nothing.

Why it matters

CRR is why "we have deposits but can't lend more" is true — a chunk of every deposit is frozen at RBI. Expect this whenever liquidity comes up.

A worked example

At 4.5% CRR, ₹45 cr of every ₹1,000 cr in deposits sits idle at RBI earning 0% — quietly raising your cost of funds.

The picture

₹1,000 cr depositsCRR: ₹45 cr idle₹955 cr to lendEffective cost offunds4.5% locked at RBI (0%)rest is lendableearns nothing, so raises

What it leads to

CRR is one of two forced holdings, alongside SLR, that shrink lending and push cost of funds up.

Where it sits in the map

RBI & the reporateCost of fundsRBI & the reporateSLR (StatutoryLiquidity Ratio)SLR (StatutoryLiquidity Ratio)CRR (Cash ReserveRatio)

Follow the causation

this is the other forced holding that locks up your depositsSLR (Statutory Liquidity Ratio)→this is the number CRR quietly pushes upCost of funds→this is the rate RBI pairs with CRR to steer the systemRBI & the repo rate→