Given Cash Reserve Ratio 0.19 and Statutory Liquidity Ratio 0.06, how much will be the credit creation if there are new deposits of Rs 1,000 crore in commercial banks.


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Legal reserve ratio `= "CRR" + SLR = 0.19 + 0.6 = 0.25`
Credit creation = New deposit `1//"LRR" = 1000 xx 1//0.25 = Rs 4,000` crore

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