Economics • Indian EconomyEasy
What does the term 'Statutory Liquidity Ratio (SLR)' require commercial banks in India to do?
A. Maintain a specified percentage of their net demand and time liabilities in liquid assets like government securities.✓ Correct Answer
B. Keep a minimum cash reserve directly with the central bank without earning interest.
C. Allocate a fixed percentage of loans to priority agricultural sectors.
D. Maintain foreign currency reserves to cover short-term trade debts.
💡 Solution & Explanation
The Statutory Liquidity Ratio requires commercial banks to maintain a specified percentage of their net demand and time liabilities in safe, liquid assets such as government securities under Section 24 of the Banking Regulation Act, 1949. The Cash Reserve Ratio involves keeping funds directly with the central bank, which is distinct from SLR.
More Economics Indian Economy questions
- What is the primary objective of the 'FAME India' (Faster Adoption and Manufacturing of (Hybrid &) Electric…
- What is the primary objective of the Pradhan Mantri Jan Dhan Yojana launched as a national mission for…
- Under the provisions of the Indian Constitution, through which annual financial statement is the estimated…
- What is the primary focus of the 'PM-MITRA (Mega Integrated Textile Region and Apparel)' scheme implemented…
- What is the economic significance of the 'Rajiv Gandhi Kisan Nyay Yojana' implemented in Chhattisgarh?