Question

The impact of statutory Reserve Ratio in reducing inflation depends on banking habits of people(True/False).

• A. True
• B. False
• C. Can't say
• D. None of the above

Answer 1

The correct option is A True

Statutory Liquidity Ratio (SLR) refers to liquid assets i.e. cash which the commercial banks must hold with themselves on a daily basis as a portion of their total deposits. The impact of Statutory Reserve Ratio on reducing inflation depends upon the banking habits of the people as the total deposits of the bank depends on the banking habits and if the total deposits are high then the statutory reserve ratio will have more impact on inflation.