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Question

That portion of total deposit which a commerical bank has to keep with itself in the form of eligible securities is called _________.

A
CRR
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B
SLR
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C
OMO
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D
Bank Rate
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Solution

The correct option is B SLR
Statutory Liquidity Ratio (SLR) refers to liquid assets that the commercial banks must hold on daily basis as a percentage of their total deposits. SLR is determined by the central bank and is a legal requirement to be fulfilled by the commercial banks. It includes
1. Cash
2. Gold
3. Unencumbered approved securities

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