- published: 04 Nov 2015
- views: 828
Statutory liquidity ratio (SLR) is the Indian government term for reserve requirement that the commercial banks in India require to maintain in the form of gold, government approved securities before providing credit to the customers. Statutory Liquidity Ratio is determined by Reserve Bank of India and maintained by banks in order to control the expansion of bank credit.
The SLR is determined by a percentage of total demand and time liabilities. Time Liabilities refer to the liabilities which the commercial banks are liable to pay to the customers after a certain period mutually agreed upon, and demand liabilities are such deposits of the customers which are payable on demand. An example of time liability is a six month fixed deposit which is not payable on demand but only after six months. An example of demand liability is a deposit maintained in saving account or current account that is payable on demand through a withdrawal form such as a cheque.
The SLR is commonly used to control inflation and fuel growth, by increasing or decreasing it respectively. This counter acts by decreasing or increasing the money supply in the system respectively. Indian banks’ holdings of government securities are now close to the statutory minimum that banks are required to hold to comply with existing regulation. When measured in rupees, such holdings decreased for the first time in a little less than 40 years (since the nationalisation of banks in 1969) in 2005–06.currently it is 21.5 percent as on 15 September 2015.
Liquidity Ratio may refer to:
Liquidity ratio expresses a company's ability to repay short-term creditors out of its total cash. It is the result of dividing the total cash by short-term borrowings. It shows the number of times short-term liabilities are covered by cash. If the value is greater than 1.00, it means fully covered.
The formula is the following:
LR = liquid assets / short-term liabilities.
Welcome to the Investors Trading Academy talking glossary of financial terms and events. Our word of the day is “Statutory Liquidity Ratio” Statutory Liquidity Ratio is the amount of liquid assets such as precious metals or other approved securities, which a financial institution must maintain as reserves other than the cash. SLR is used to limit the expansion of bank credit, for ensuring the solvency of banks even if all the loans by the bank go bad, the bank can still retrieve a part of it by selling the gold or govt securities. The main objectives for maintaining the SLR ratio are the following: To control the expansion of bank credit. To ensure the solvency of commercial banks. To compel the commercial banks to invest in government securities like government bonds. If any bank fails ...
This video will help you to understand SLR (Statutory Liquidity Ratio) in very simple manner.. Thanks for visiting..
In this class Ms. Dipika explains about the major banking terms like cash reserve ratio, Statutory liquidity ratio, repo rate, reverse repo rate in details and how it affects the economy. For more information visit www.doorsteptutor.com or email contactus@doorsteptutor.com
अर्थशास्त्राला घाबरणारे विद्यार्थी, MPSC व UPSC चा अभ्यास करणारे विद्यार्थी यांच्यासाठी - रोख राखीव प्रमाण (CRR) व वैधानिक रोखता प्रमाण या संकल्पना व त्यांचा किंमतवाढीवर आणि अर्थव्यवस्थेवर होणारा परिणाम For UPSC/MPSC aspirants and students of economics in general and for all students - This video in Marathi Language explains the concept of CRR (Cash Reserve Ratio) and SLR (Statutory Liquidity Ratio) and its effect on inflation and economy
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Difference between crr and slr livemint . , . . . . But what is slr and cash reserve ratio (crr), and how are they different? banks are required to invest a certain percentage of their time and demand deposits in assets specified by rbi, including gold, and government bonds and securities. Crr is a portion of the banks ndtl or here are some more compilation of topics and latest discussions relates to this video, which we found thorough the internet. Hope this information will helpful to get idea in brief about this. Thus, despite having similarity in nature and purpose, there are many differences between crr and slr that will be highlighted in this article cash reserve ratio (crr) each bank has to keep a certain percentage of its total deposits with rbi as cash reserves. Statut...
In this video we describe why RBI changes a few rates like Repo rate, SLR, CRR etc. What is its role in Indian economy? Before that we have explained the role of money in an economy and the meaning of inflation. In case of any queries, please let us know in the comments.
ABOUT VIDEO: This video will help viewers understand how exactly does the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) operate. Whats the difference between Repo borrowing & Marginal Standing Facility Borrowing. How is the Statutory Liquidity Ratio (SLR) maintained while borrowing. Also helps you understand Net Demand & Time Liability (NDTL) and Cash Reserve Ratio (CRR). The impact of LAF, Repo & MSF on the equity and Debt Market is the theme of the video Please leave us a comment/suggestion on our video and do hit "LIKE" if you like the video. SUBSCRIBE TO OUR CHANNEL FOR FULL ACCESS TO ALL OUR VIDEOS ABOUT US: Ambition Learning Solutions is a preemptive training institute providing trainings to undergraduates, post graduates and working professionals on var...
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