BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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CRR
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SLR
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both
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Detailed explanation-1: -Statutory Liquidity Ratio (SLR) is the percentage of demand deposits which the commercial banks are legally required to maintain as their liquid assets.
Detailed explanation-2: -The correct option is C Cash reserve ratio. As a part of the monetary policy, there are certain reserve requirements that a commercial bank has to follow. The minimum reserve maintained with the Reserve Bank of India (RBI) is called the cash reserve ratio or the CRR.
Detailed explanation-3: -Cash Reserve Ratio (CRR) is the percentage of money, which a bank has to keep with RBI in the form of cash. Whereas, Statutory Liquidity Ratio (SLR) is the proportion of liquid assets to time and demand liabilities.
Detailed explanation-4: -CRR is a reserve maintained by banks with the RBI. It is a percentage of the banks’ deposits maintained in cash form. SLR is an obligatory reserve that commercial banks must maintain themselves. It is a percentage of commercial banks’ net demand and time liabilities, maintained as approved securities.
Detailed explanation-5: -Currently, the statutory liquidity ratio rate is 18%. (As on August 27, 2020). RBI has kept 40% as the maximum limit for SLR. SLR is calculated as a percentage of all the deposits held by the bank.