WBCS.LIVE practice question

Which of the following are the primary components for maintaining the Statutory Liquidity Ratio (SLR)?

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

Answer options

  1. Cash and Gold only
  2. Cash, Gold, and Unencumbered Approved Securities
  3. Cash and Government Securities only
  4. Foreign Currency and Gold only

Correct answer and explanation

Correct answer: Cash, Gold, and Unencumbered Approved Securities

Explanation: āœ… Correct Answer: B) Cash, Gold, and Unencumbered Approved Securities šŸ“š Explanation: Under Section 24 of the Banking Regulation Act, 1949, all scheduled commercial banks must maintain a certain percentage of their NDTL in the form of liquid assets. These assets can include cash, gold, or investment in unencumbered government and other approved securities. Unlike CRR, SLR earns interest for the banks because it is invested in securities.