The banks are required to maintain a certain ratio between their cash in hand and total assets. This is called:
✓ Correct answer: b) SLR (Statutory Liquid Ratio)
ExplanationThe Statutory Liquidity Ratio (SLR) is the mini- mum percentage of a bank’s net demand and time liabilities (NDTL) that it must maintain in the form of liquid assets such as cash, gold, or government-approved securities.This requirement ensures that banks have sufficient liquidity to meet withdrawal demands and maintain financial stability.The Re- serve Bank of India (RBI) sets and regulates the SLR to control the expansion of bank credit and ensure the solvency of banks.As of December 6, 2024, the SLR is set at 18%.The RBI has the authority to adjust this rate as part of its monetary policy toolkit.210
Practice more Economy PYQs
Attempt a free 10-question quiz or browse the full Economy previous-year-question bank with instant answers and explanations.
📈 Economy PYQs →