BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The securites under SLR can be mortgage to RBI while borrowing money through
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Repo rate
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Bank Rate
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MSF
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ALL
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None
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Explanation:
Detailed explanation-1: -While borrowing money under MSF, banks are permitted to make use of the Statutory Liquidity Ratio (SLR) securities which is otherwise not allowed in case of Repo rate.
Detailed explanation-2: -Under MSF, banks can borrow funds from the RBI by pledging government securities within the limits of the SLR. This special facility can only be pledged by banks under emergency situations.
Detailed explanation-3: -The eligible assets for SLR mainly include cash, gold and approved securities by the RBI. Most banks keep the SLR in the form of government approved securities specifically – central government bonds and treasury bills as they give a reasonable return.
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