Q21) Banks should maintain SLR in liquid assets. Which of the following is not a constituent of SLR maintained by the banks?

a) Gold

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b) Government securities

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c) Current account balances with other banks

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d) All public sector bonds

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Solution

The correct option is D d) All public sector bonds
Ans: D
Explanation: SLR can be maintained only in RBI approved public sector bonds not all the public sector bonds

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Similar questions

SLR requires the commercial banks to build their liquid assets by way of:

Q. 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?

50. Identify the correct statements.

1. Marginal Standing Facility (MSF) Rate: It is rate at which the scheduled banks can borrow funds overnight from RBI against government securities

2. Statutory Liquidity Ratio (SLR): It is amount that banks have to maintain a stipulated proportion of their net demand and time liabilities (NDTL) in the form of liquid assets like cash, gold and unencumbered securities, treasury bills, dated securities etc.

Which among the following institutions have to maintain SLR?

Q. Assertion (A) - An increase in SLR increases the excess reserves of commercial banks and limits their lending power.
Reason (R) - A change in SLR affects the power of commercial banks to create credit.

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Q21) Banks should maintain SLR in liquid assets. Which of the following is not a constituent of SLR maintained by the banks?

The correct option is D d) All public sector bondsAns: D Explanation: SLR can be maintained only in RBI approved public sector bonds not all the public sector bonds

The correct option is D d) All public sector bonds
Ans: D
Explanation: SLR can be maintained only in RBI approved public sector bonds not all the public sector bonds