If RBI reduces the SLR by 50 basis points. which of the following is likely to happen?

The correct option is A. Scheduled Commercial Banks may cut their lending rates

SLR is a mechanism used by RBI to regulate the liquidity of assets nd requires the banks to invest a certain portion of their deposits in I-approved securities or gold. When SLR is reduced, banks have more money to lend which may lead to a decrease in lending rates. By changing the level of SLR, the Reserve Bank of India can increase r decrease bank credit expansion. Ensuring the solvency of commercial banks. By reducing the level of SLR, the RBI can increase liquidity with the commercial banks, resulting in increased investment. is is done to fuel growth and demand.