Normal 0 MicrosoftInternetExplorer4 Consider the following statements with regard to Statutory Liqu...........

Economic Affairs Money Supply and Monetary Policy

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Consider the following statements with regard to Statutory Liquidity Ratio (SLR)

1.To meet SLR, Commercial Banks can use cash only

2.SLR is determined by the banks by themselves

3.SLR restricts the banks leverage in pumping more money into the economy

Which of the statements given above is/are correct?

1, 2 and 3

1 and 3

2 and 3

3 only

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Explanation:

.First statement is incorrect. Statutory liquidity ratio (SLR) is the Indian government term for reserve requirement that the commercial banks in India require to maintain in the form of gold, government approved securities before providing credit to the customers.
Second statement is incorrect. Statutory Liquidity Ratio is determined by Reserve Bank of India maintained by banks in order to control the expansion of bank credit.