Decreasing percentage of statutory liquidity ratio by RBI
A)Increase the volume credits at the hands of commercial banks.
B)Reduce inflation.
C)Decrease the volume credit at the hands of commercial banks.
D)Raise the interest rate charged by the commercial banks.

Question

Quizplus · Accepted Answer

Decreasing the Statutory Liquidity Ratio (SLR) allows banks to have more funds available for lending, thus increasing the volume of credits at the hands of commercial banks. This is because banks are required to keep a lesser portion of their deposits in safe and liquid assets, freeing up more resources for loans and advances.

Decreasing Percentage of Statutory Liquidity Ratio by RBI