The banks are required to keep some reserves in liquid form with the central bank. What are they called?

Option 1: Cash Reserve Ratio -> Reserves maintained with the central bank in liquid cash form.

Option 2: Statutory Liquidity Ratio -> Liquid assets maintained by banks themselves, not with central bank.

Option 3: Bank Rate -> Interest rate for central bank lending to commercial banks.

Option 4: Reverse Repo -> Rate at which central bank borrows from commercial banks.

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Hence, Cash Reserve Ratio -> CRR is the percentage of net demand and time liabilities (deposits) that commercial banks are required to maintain as reserves in liquid cash form with the central bank. This is a monetary policy tool used to control money supply and liquidity in the banking system. When CRR increases, banks have less money to lend, reducing liquidity; when it decreases, more funds are available for lending. -> correct