WBCS.LIVE practice question

The Statutory Liquidity Ratio (SLR) maintained by commercial banks in India includes which of the following?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Only physical gold reserves.
  2. Only approved government securities.
  3. Cash, gold, and approved government securities.
  4. Cash reserves kept exclusively with the RBI.

Correct answer and explanation

Correct answer: Cash, gold, and approved government securities.

Explanation: āœ… Correct Answer: C) Cash, gold, and approved government securities. šŸ“š Explanation: The Statutory Liquidity Ratio (SLR) is the minimum percentage of deposits that commercial banks must maintain in the form of liquid assets. These designated liquid assets primarily include cash, gold reserves, and government-approved securities. By adjusting the SLR, the Reserve Bank of India can effectively control the expansion of bank credit and ensure the solvency of commercial banks.