Question
What is the full form of SLR, an important tool used by RBI
to control money supply?Solution
SLR stands for Statutory Liquidity Ratio. It is a monetary policy tool used by the Reserve Bank of India (RBI) to assess liquidity at banks' disposal. It represents the minimum percentage of deposits that commercial banks must maintain through gold, cash, and other securities. These deposits are maintained by the banks themselves, not with the RBI.
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