_____________ refers to the minimum percentage of total demand and time deposits which commercial banks are required to maintain with themselves.

[0.80 marks]

Statutory Liquidity Ratio

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Cash Reserve Ratio

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Repo Rate

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Reverse Repo Rate

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Solution

The correct option is A Statutory Liquidity Ratio
Statutory Liquidity Ratio refers to the minimum percentage of total demand and time deposits that commercial banks are required to maintain with themselves. A change in SLR affects the power of commercial banks to create credit.

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The percentage of demand deposits which the commercial banks are legally required to maintain as their liquid assets is called:

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