Distinguish between Statutory Liquidity Ratio and Cash Reserve Ratio.

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Solution

SLR - Statutory Liquidity Ratio (SLR) refers to that portion of the total deposits of a commercial bank which it has to keep with itself in the form of cash reserves, gold and government securities.
CRR- Cash Reserve Ratio refers to that percentage of total deposits of commercial bank which it has to keep with the RBI in the form of cash reserves.

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Explain the meaning of cash reserve ratio and statutory liquidity ratio.

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