Question

Consider the following statements with regard to SLR:
1) To meet SLR, commercial banks can use cash only.
2) SLR is maintained by the banks with themselves.
3) SLR restricts the banks leverage in pumping more money into the economy.
Which of the statement(s) given above is/are correct?

• A. 1 and 2
• B. 1 and 3
• C. 2 and 3
• D. Only 2

Answer 1

The correct option is C 2 and 3

Statutory Liquidity Ratio (SLR) refers to the percentage of money which the banks have to set aside and invest in gold or RBI approved securities. It is maintained by the banks with themselves and restricts the banks' leverage in pumping more money into the economy.