The Statutory Liquidity Ratio may be maintained in which of these forms?

Only as cash deposited with the Reserve BankCorrect answerYour answerCash, gold or approved securities held by the bank itselfCorrect answerYour answerOnly as government securities lodged with the Ministry of FinanceCorrect answerYour answerOnly as foreign currency reservesCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

The SLR is held by the bank on its own books, in cash, gold or securities the RBI has approved.
Because approved securities pay interest, the SLR costs a bank far less than the CRR does.
Cash lodged with the Reserve Bank is the Cash Reserve Ratio, which is the other requirement.

Worth noting

Both ratios are set as a percentage of net demand and time liabilities — roughly, what the bank owes its depositors.

Concept: What the Statutory Liquidity Ratio may be held in
Typical timeTypical: 40 s
Your timeYours: —

The rule this testsBanking and the financial system

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The Statutory Liquidity Ratio may be maintained in which of these forms?

Explanation