ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Statutory Liquidity Ratio popularly called SLR is the minimum percentage of deposits that the commercial bank maintains through gold, cash and other securities. However, these deposits are maintained by the banks themselves and not with the RBI or Reserve Bank of India.

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: -Statutory Liquidity Ratio-Definition 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-4: -Let us understand the key difference between CRR and SLR. CRR is the percentage of money, which a bank has to keep with RBI in the form of cash. On the other hand, SLR is the proportion of liquid assets to time and demand liabilities.

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.