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Question
The Statutory Liquidity Ratio (SLR) requires commercial banks to maintain a certain percentage of their liabilities in liquid assets, which can include government securities.
Options
True
False
MCQ
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Solution
True
Explanation:
The Statutory Liquidity Ratio (SLR) is a mandated quantitative monetary tool that mandates commercial banks to keep a certain percentage of their Net and Time Liabilities (NDTL) in liquid assets. These permitted liquid assets can be retained in the form of physical cash, gold, or unencumbered government securities before extending credit to corporate and retail borrowers.
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