RBI fixes SLR (statutory liquidity ratio) from time to time – currently it is at 25%. RBI requires banks to maintain 25% of Net Demand and Time Liabilities (NDTL) which is to be maintained on daily basis by investment in cash (other than CRR) and unencumbered prescribed Central and State Government securities, Treasury bills, and Government Guaranteed Bonds. These securities are approved securities for SLR purposes under section 24 of the Banking Regulation Act, 1949, and Indian Trust Act, 1882 and are issued under Public Debt Act, 1944.
The entire investment has to be made only in G Secs and other approved securities.
Currently the RBI is trying to reduce the SLR below 25% – but that has to happen only with the Parliament’s concurrence.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.