The Cash Reserve Ratio (CRR) is the percentage of deposits that banks must park with the central bank as cash. If the CRR is 4% and a bank has $100 billion in deposits, it must keep $4 billion with the central bank — earning zero interest on that amount.
CRR is a powerful monetary policy tool. When the central bank raises CRR, banks have less money to lend, tightening credit and cooling inflation. When CRR drops, banks have more money available for lending, stimulating economic growth.
In India, the RBI's CRR is currently around 4-4.5%. In the US, the Federal Reserve reduced reserve requirements to 0% in March 2020 during COVID-19 — and has not reinstated them. China's central bank uses CRR (called RRR) extensively, with rates around 7-10% depending on bank size.