New SIDBI Grade A New Batch Starts on Nov 18

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    Question

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

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

    2. SLR is maintained by the banks with themselves.

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

    Which of the statements given above is/are correct?

    A 1, 2 and 3 Correct Answer Incorrect Answer
    B 1 and 3 Correct Answer Incorrect Answer
    C 2 and 3 Correct Answer Incorrect Answer
    D only 2 Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    SLR used by bankers indicates the minimum percentage of deposits that the banks have to maintain in the form of gold, cash or other approved government securities.

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