Money, Banking & Monetary Policy› Monetary Policy Tools & Transmission
Statutory Liquidity Ratio is to be maintained by banks in the form of I. Cash. II. Gold. III. Unencumbered investments in specified instruments. IV. Priority sector loans. Choose the correct answer using the codes given below :
Answer d.
Option d: banks hold SLR in cash, gold and unencumbered approved securities. Statutory Liquidity Ratio (SLR) is the share of a bank's net demand and time liabilities that it must keep in safe, liquid form with itself. Under Section 24 of the Banking Regulation Act, 1949, this can be held in cash, gold, or unencumbered investments in specified (approved) securities such as government securities. Priority sector loans are a separate lending target and are not liquid assets, so IV is wrong. The correct set is I, II and III.
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