Question
Regarding the Statutory Liquidity Ratio (SLR), consider
these statements: 1. SLR is maintained to ensure that banks have liquid assets to meet unexpected demand from depositors. 2. The maximum limit for SLR as per the Banking Regulation Act is 40%. 3. RBI pays interest on the gold portion of the SLR maintained by banks. Which of the statements above is/are correct?Solution
Statement 3 is incorrect. RBI does not pay any interest on the assets (cash, gold, or securities) maintained by banks for SLR purposes.
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