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Statutory Liquidity Ratio: Understanding Monetary Policy (for UPSC CSE)
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All banks of India have to keep a fraction of their total net time and demand liability. That's how the lesson starts with the definition of SLR or Statutory Liquidity Ratio. After covering the definition, the lesson goes on to deal with what all SLR contains including cash, gold reserves etc, how it was brought down after the recommendation of Narsimhan committee and the lesson ends with the discussion between differences of SLR and CRR.

Ayussh Sanghi is teaching live on Unacademy Plus

Ayussh Sanghi
Passionate Educator - CSE / Other Govt Exams [Peep into my Unacademy Plus Courses & experience awesome learning.]

U
Unacademy user
please use hindi full
Sir, I have a doubt. If the internal mechanism of bank rate, repo rate, reverse repo rate, Omo and CRR, is to control the money supply in the system. Why does it have so many mechanisms instead of one mechanism?
everything has its own function repo rate for small time loans bank rate for longer time loans like that only
as SLR is kept in non cash form, why did you mention cash in the 5th slide sir???
Sir do Financial institutions and Non banking financing companies also have to maintain CRR and SLR
Sir on ur video on crr ... In that slide at 8:20 u have mentioned that reduction in crr leads to Decrease In money supply? How
A
Thanks so much sir..
  1. MONETARY POLICY Statutory Liquidity Ratio PART 6 BY AYUSSH SANGHI


  2. ABOUT ME >Passionate about Teaching >Taught at most reputed Civil Services Institutes >CA, Lawyer >Hit "Contribute to Ayussh" Follow me on: https://unacademy.in/user/ AyusshSanghi


  3. Statutory Liquidity Ratio (SLR All banks of India have to keep a fraction of their total net time and demand liabilities in the form of liquid assets such as: G-secs, precious metals approved securities amongst others.


  4. Statutory Liquidity Ratio (SLR The Ratio of these liquid assets to the total demand and time liabilities is called Statutory Liquidity Ratio. * This ratio was prescribed by the Section 24 (2A) of Banking Regulation Act 1949 * The original ratio mandated for a 23% SLR.


  5. What all forms a part of SLR? SLR deposits include: Cash, Gold reserves kept in the bank Balances with RBI, * Net balance in Current Account & * Investment in Government Securities (if any). * SLR has to be maintained on a daily basis by every bank


  6. What all forms a part of SLR? * The banking system of India has had very high SLR's in the 1980s, and highest in first two year of 1990s. * On the recommendations of Narsimham Committee I it was brought down from 38.5% to 25%. * At present, the SLR is 21% (August 2016)


  7. Differences between CRR and SLR CRR and SLR are the quantitative instruments of Reserve Bank of India's monetary control policy. CRR indicates the quantum of cash that banks are required to keep with the Reserve Bank (in their premises) as a proportion of their net demand and time liabilities (NDTL) SLR prescribes the amount of money that banks must invest in securities issued by the government. This is not kept with RBI but with banks themselves.