Statutory Liquidity Ratio
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Statutory Liquidity Ratio (SLR) is a term used in the regulation of banking in India. It is the amount which a bank has to maintain in the form of cash, gold or approved securities. The quantum is specified as some percentage of the total demand and time liabilities of a bank. This percentage is fixed by the Reserve Bank of India. The date which is taken to calculate the demand and time liabilities of
presently it is 25%.
The President of India A P J Abdul Kalam has given his assent to the Ordinance empowering the Reserve Bank of India (RBI) to cut the statutory liquidity ratio (SLR) below 25%.
The 25% is the minimum SLR (the statutory requirements to park their money in government bonds)limit the RBI can fix at present.
The move comes ahead of the credit review by the Apex Bank, slated for January 31st.
The objectives of SLR are 1) to restrict the expansion of bank credit 2) to augment the investment of the banks in Government securities and 3) to ensure solvency of banks.
[edit] See also
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