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If the total amount of deposits with a bank is 200 crores and the Reserve Ratio (RR) is 5% then what is the maximum loanable amount which the bank can lend out in the form of a loan?

Solution

✅ Correct Option: 2

Required reserves =5%×200=10= 5\% \times 200 = 10 crores. Maximum loanable amount =200−10=190= 200 - 10 = 190 crores.

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