BANKING AFFAIRS

Detailed explanation-1: -RBI has kept 40% as the maximum limit for SLR. SLR is calculated as a percentage of all the deposits held by the bank. Another way to define the SLR meaning is the ratio of a bank’s liquid assets to its net demand and time liabilities.

Detailed explanation-2: -The maximum limit of SLR is 40% and minimum limit of SLR is 0 In India, Reserve Bank of India always determines the percentage of SLR. There are some statutory requirements for temporarily placing the money in government bonds. Following this requirement, Reserve Bank of India fixes the level of SLR.

Detailed explanation-3: -Net Demand and Time Liabilities (NDTL): It is the difference between the sum of demand and time liabilities (deposits) of a bank (with the public or the other bank) and the deposits in the form of assets held by the other banks.

Detailed explanation-4: -For computation and maintenance of SLR, banks have to report their latest net demand and time liabilities to RBI every fortnight (Friday). If any commercial bank fails to maintain the SLR, RBI will levy a 3% penalty annually over the bank rate.

Detailed explanation-5: -As of 10th April 2022, the RBI-approved SLR rate in India is 18%.