Meaning
SLR full form is Statutory Liquidity Ratio. SLR is the minimum percentage of deposits that banks must keep in the form of cash, gold, or government securities.
Definition
SLR is a reserve requirement set by the Reserve Bank of India to ensure that banks maintain enough liquid assets and operate safely.
Purpose
The main purpose of SLR is to control credit flow, promote financial stability, and ensure banks can meet withdrawal demands.
How It Works
Banks must maintain this ratio before offering credit to customers. If SLR increases, banks have less money to lend.
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