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      Question

      Which of the following increases when RBI raises the

      SLR?
      A Liquidity available to banks for lending Correct Answer Incorrect Answer
      B Banks' borrowing cost from RBI Correct Answer Incorrect Answer
      C Amount banks must invest in government securities Correct Answer Incorrect Answer
      D Inflation rate in the economy Correct Answer Incorrect Answer
      E Banks' CRR balance with RBI Correct Answer Incorrect Answer

      Solution

      Increase in SLR reduces banks' lending capacity as more funds are locked in G-Secs.

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