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Correct Option is Only 3

PSL are administered independently of the CRR requirements. Banks must lend a portion of their deposits in form of PSL. The recent move was not related to PSL. CRR is the proportion of deposits that banks have to keep as cash with the RBI. The present requirement is only 4% of total demand deposits. But, as per the recent measure Banks had to maintain 100% CRR for incremental deposits they received between September 16, 2016 and November 11, 2016. This is because over 2 lakh crores of cash was deposited in the banking system. Lending this fund will create a massive rise in liquidity in the financial markets and lead to inflation and volatility.

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