CRR- Under section 42(1) of rbi act 1934, every SCB in india has to keep a part of their NET DEMAND AND TIME LIABILITY with rbi in the form of ONLY CASH.
It is maintained by only schedule commercial bank and comes under rbi act 1934.
SLR- According to section 24(2A) of BANKING REGULATION ACT 1949, all financial institution ( NBFC, SCB, RRB etc.) has to maintain some percentage of their NET DEMAND AND TIME LIABILITY with themselves at all time.
Slr is maintain in the form of CASH, GOLD, G SEC, CURRENT A/C WITH OTHER BANKS AND LISTED DEPOSIT WITH RBI.
objective of SLR
1. to restrict the expansion of bank credit.
2. to enhance the investment in g sec
3. to ensure solvency of banks.
MAX SLR CAN BE 40%
MINIMUM IS whatever the percentage..
NOTE- if any bank have Rs. 100 as their net demand and time liability then how much of this is always secured?
ans - CRR + SLR ( as they are called as reserve ratio. they can not be lent by bank.)
for article archives click here
It is maintained by only schedule commercial bank and comes under rbi act 1934.
SLR- According to section 24(2A) of BANKING REGULATION ACT 1949, all financial institution ( NBFC, SCB, RRB etc.) has to maintain some percentage of their NET DEMAND AND TIME LIABILITY with themselves at all time.
Slr is maintain in the form of CASH, GOLD, G SEC, CURRENT A/C WITH OTHER BANKS AND LISTED DEPOSIT WITH RBI.
objective of SLR
1. to restrict the expansion of bank credit.
2. to enhance the investment in g sec
3. to ensure solvency of banks.
MAX SLR CAN BE 40%
MINIMUM IS whatever the percentage..
NOTE- if any bank have Rs. 100 as their net demand and time liability then how much of this is always secured?
ans - CRR + SLR ( as they are called as reserve ratio. they can not be lent by bank.)
for article archives click here
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