Multiple choice

The banks are required to maintain a certain ratio between their cash in hand & total assets. What is this known as?

  1. SLR (Statutory Liquidity Ratio)

  2. CLR (Central Liquidity Ratio)

  3. SBR (Statutory Bank Ratio)

  4. None of these

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A Correct answer
Explanation

SLR (Statutory Liquidity Ratio) is the ratio that banks must maintain between their liquid assets (cash, gold, approved securities) and their net demand and time liabilities (total deposits). This is a regulatory requirement by the Reserve Bank of India to ensure bank solvency.