Question

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Statutory Liquidity Ratio (SLR) refers to?

• A. Interest on long term loans given by RBI to the Banks
• B. Percentage of NDTL that the banks keep with the RBI
• C. The percentage of NDTL, the banks have to keep within itself.
• D.
  Auction and repurchase of GSecurities

Answer 1

The correct option is C The percentage of NDTL, the banks have to keep within itself.

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> The banks and other financial institutions in India have to keep a fraction of their total net time and demand liabilities in the form of liquid assets such as G-secs, precious metals, approved securities etc with itself. Statutory Liquidity Ratio or SLR is a minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold or other securities.

SLR is basically the reserve requirement that banks are expected to keep before offering credit to customers.The Ratio of these liquid assets to the total demand and time liabilities is called Statutory Liquidity Ratio.