Cash Reserve Ratio (CRR) is the stipulated minimum percentage of the total deposit base of a bank that it has to maintain with the central bank to meet any unforeseen large customer withdrawals. The amount specified by CRR is held as cash or deposits with the central bank which could be used in case of an emergency cash requirement. In India, the Reserve Bank of India (RBI), like all other key policy rates and ratios, also sets the CRR which is currently at 4%. Lately, there has been talk of the RBI cutting CRR in its policy review meeting on Tuesday to help banks cut their lending rates. Globally, central banks use CRR as a monetary policy tool. In situations when there is excess liquidity in the banking system, central banks hike CRR to suck out some extra liquidity. They cut CRR in situations where the system is short on liquidity as a cut releases some extra liquidity into the system. Since changes in CRR lead to changes in the system liquidity, it also can be used to influence the rate of interest banks charge to their borrowers.