The correct answer is B. Statutory Liquid Ratio (SLR).
The Statutory Liquid Ratio (SLR) is a reserve requirement imposed by the Reserve Bank of India (RBI) on commercial banks in India. It is the minimum percentage of the total deposits that banks are required to hold in cash or in liquid form such as government securities. The SLR is currently set at 18%.
The SLR is intended to ensure that banks have enough liquidity to meet the demands of their customers and to prevent a run on the banks. It also helps to control inflation by absorbing excess liquidity from the market.
The SLR is a controversial measure, with some economists arguing that it is too high and stifles lending. However, the RBI argues that the SLR is necessary to maintain financial stability.
A. Statutory Bank Ratio (SBR) is not a term used in banking.
B. Statutory Liquid Ratio (SLR) is the minimum percentage of the total deposits that banks are required to hold in cash or in liquid form such as government securities.
C. Central Bank Reserve (CBR) is the reserve held by the central bank of a country. It is used to meet the day-to-day liquidity needs of the banking system and to provide stability to the financial system.
D. Central Liquid Reserve (CLR) is not a term used in banking.