Question

Statement (1): SLR is determined by the central bank.

Statement (2): CRR is fixed by the commercial banks.

Options

• Both the statements are true.

• Both the statements are false.

• Statement 1 is true, Statement 2 is false.

• Statement 2 is true, Statement 1 is false.

Answer 1

Statement 1 is true, Statement 2 is false.

Explanation:

• Statement (1): The Statutory Liquidity Ratio (SLR) is set and mandated only by the central bank (such as the RBI in India) to ensure financial stability.
• Statement (2): The Cash Reserve Ratio (CRR) is also legally determined by the central bank, rather by individual commercial banks.