Commercial banks has to keep a certain proportion of its cash reserves with the RBI as Cash Reserve Ratio (CRR). The central bank provides them with centralized clearing and remittance facility. As the lender of the last resort when the commercial banks fail to meet their financial requirements from other sources, they approach to the central bank for loans and advances. The central bank assists such banks through discounting of approved securities and bills of exchange. The central bank controls them by periodic inspection and returns filled by them.
