Ms Sakshi, an economics teacher, was explaining the concept of ‘minimum percentage of the total deposits to be kept by any commercial bank with the Central Bank of the country, as per norms and statute prevailing in the country’. From the following, choose the correct alternative which specifies towards the concept explained by her?
a) Cash Reserve Ratio
b) Repo Rate
c) Bank Rate
d) Statutory Liquidity Ratio
a) Cash Reserve Ratio
b) Repo Rate
c) Bank Rate
d) Statutory Liquidity Ratio
Answers & Comments
The correct alternative that specifies the concept explained by Ms. Sakshi is:
d) Statutory Liquidity Ratio (SLR)
The Statutory Liquidity Ratio refers to the minimum percentage of the total deposits that commercial banks are required to keep with the Central Bank of the country, as per the prevailing norms and statutes. It is a regulatory measure that ensures the liquidity and stability of the banking system.
Verified answer
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Ms. Sakshi was explaining the concept of:
a) Cash Reserve Ratio
The Cash Reserve Ratio (CRR) is the minimum percentage of total deposits that commercial banks are required to keep with the central bank (in this case, the Central Bank of the country).