CRR is a certain percentage of Total Deposits which the banks have to keep with RBI, means banks cannot lend this amount of money to borrowers. This is done so that if a depositor comes to withdraw money banks should have the amount with them to meet there withdrawl requirement.
Main Objective behind CRR is to meet some sort of liquid cash against depositors.
CRR is fixed by RBI and is changed from time to time.
Example : If there is a total deposit of 1000 with the bank and CRR is 3% then banks have to deposit Rs. 30 with the RBI, means bank cannot lend this much amount for loans