Match List-I with List-II
List-I List-II (A) Cash Reserve Ratio (I) Reserves + Loans (B) Net Worth (II) Deposits (C) Assets (III) Percentage of deposits which a bank must keep as cash reserves with the central bank (D) Liabilities (IV) Assets – Liabilities
Choose the correct answer from the options given below:
Match List-I with List-II
| List-I | List-II |
|---|---|
| (A) Cash Reserve Ratio | (I) Reserves + Loans |
| (B) Net Worth | (II) Deposits |
| (C) Assets | (III) Percentage of deposits which a bank must keep as cash reserves with the central bank |
| (D) Liabilities | (IV) Assets – Liabilities |
Choose the correct answer from the options given below:
Solution
Option 1 -> (A)-(I), (B)-(II), (C)-(III), (D)-(IV) - Incorrect matching of all terms.
Option 2 -> (A)-(I), (B)-(IV), (C)-(II), (D)-(III) - Incorrect match for Cash Reserve Ratio and Assets.
Option 3 -> (A)-(I), (B)-(II), (C)-(IV), (D)-(III) - Incorrect match for Cash Reserve Ratio and Net Worth.
Option 4 -> (A)-(III), (B)-(IV), (C)-(I), (D)-(II) - Correct matching of all banking terms.
Hence, Option 4: (A)-(III), (B)-(IV), (C)-(I), (D)-(II) -> Cash Reserve Ratio (CRR) is the statutory percentage of deposits that commercial banks must maintain as reserves with the central bank. Net Worth represents the capital or equity of a bank, calculated as Assets minus Liabilities. Assets of a bank primarily consist of Reserves (cash holdings) and Loans (advances given to borrowers). Liabilities of a bank mainly include Deposits made by customers, which the bank owes to depositors. -> correct
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