Economics · Banking and Monetary Policy
What is the primary function of the Statutory Liquidity Ratio (SLR) in India?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1To adjust overnight interbank lending rates automatically
- 2To penalize banks for poor asset quality
- 3To ensure banks maintain liquidity by holding cash, gold, or approved government securities✓
- 4To restrict commercial banks from investing in government securities
Correct answer
To ensure banks maintain liquidity by holding cash, gold, or approved government securities
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