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    Question

    What the incorrect about SLR (statutory Liquidity

    Ratio)? i.  The SLR is determined by a percentage of gross demand and time liabilities ii. For default in maintaining SLR, the bank will have to pay penalty to RBI iii.Maximum limit of SRL is 40% and minimum is 0%. 
    A 1) Only i & ii Correct Answer Incorrect Answer
    B 2) Only i & iii Correct Answer Incorrect Answer
    C 3) Only i Correct Answer Incorrect Answer
    D 4) Only ii Correct Answer Incorrect Answer
    E 5) None of these Correct Answer Incorrect Answer

    Solution

    SLR is determined as a percentage of Net Demand and Time Liabilities The maximum limit of SLR is 40% and minimum limit of SLR is 0 In India, RBI determines the percentage of SLR in this range. If any bank fails to maintain the SLR, then it has to pay penalty to penal interest at the rate of 3% per annum above the Bank Rate, on the shortfall amount for that particular day. If the shortfall continues next day the penal interest can be increased to 5% per annum above the Bank Rate.

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