#roleofstatutoryliquidityratio
#SLRpurpose
#SLRimportance


❤️ Statutory Liquidity Ratio (SLR) : ❤️


The share of NDTL that a bank is required to maintain in safe and liquid
assets, such as, burdenless government securities, cash and gold.

👍Changes in SLR often influence the availability of resources in the banking
system for lending to the private sector.

👍Statutory liquidity ratio is
determined by Reserve Bank of India maintained by banks in order to control
the expansion of bank credit.

👍For computation and maintenance of Statutory Liquidity Ratio, banks have to report their latest net demand and time liabilities to RBI every fortnight (Friday).

👍If any commercial bank fails to maintain the Statutory Liquidity Ratio, RBI will levy a 3% penalty annually over the bank rate.

👍Defaulting on the next working day too will lead to a 5% fine.

👍The purpose of the (SLR) is to allow the financial bodies in India to maintain liquidity.
SLR also helps in maintaining the inflation and credit flow in the country.


👍One of the biggest roles of SLR is to maintain the minimum rate also called the base rate at which the lenders in India can lend money to their customers.
SLR plays a significant role in buidling transparency between the RBI and other banks in India.

👍It is the RBI which decides on the SLR.

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