As per the news published in major newspapers, the Reserve Bank of India (RBI) raised Statutory Liquidity Ratio (SLR) by 100 basis points to 25% . What was/were the reason(s) owing to which RBI raised the SLR?begin{enumerate}item It will help in reducing liquidity in the market.item Inflation will come down substantially.item It will facilitate companies to launch their IPOs as the financial climate will become conducive for the same.end{enumerate}

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

As per the news published in major newspapers, the Reserve Bank of India (RBI) raised Statutory Liquidity Ratio (SLR) by 100 basis points to 25% . What was/were the reason(s) owing to which RBI raised the SLR?

A	Only 1
B	Only 2
C	Only 1 & (2)
D	Only 2 & (3)

Explanation:

Detailed explanation-1: -Statutory Liquidity Ratio or SLR is the minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold or other securities. It is basically the reserve requirement that banks are expected to keep before offering credit to customers.

Detailed explanation-2: -The current SLR rate is 18.00% as of April 2022. The RBI decides the SLR rate and reserves all rights to increase and decrease it. The current SLR rate is 18.00% as of April 2022.

Detailed explanation-3: -When SLR is reduced, banks have more money to lend which may lead to a decrease in lending rates. By changing the level of SLR, the Reserve Bank of India can increase r decrease bank credit expansion. Ensuring the solvency of commercial banks.

Detailed explanation-4: -CRR refers to the percentage of deposits banks have to keep as reserve (in cash). This reserve sum is not available for banks for lending and thus if the CRR increases, banks will have less money to lend. Was this answer helpful?

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