{"id":914,"date":"2024-03-05T15:07:37","date_gmt":"2024-03-05T15:07:37","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=914"},"modified":"2024-03-05T15:07:37","modified_gmt":"2024-03-05T15:07:37","slug":"the-banks-are-required-to-maintain-a-certain-ratio-between-their-cash-in-hand-and-total-assets-this-is-called","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-banks-are-required-to-maintain-a-certain-ratio-between-their-cash-in-hand-and-total-assets-this-is-called\/","title":{"rendered":"The Banks are required to maintain a certain ratio between their cash in hand and total assets. This is called"},"content":{"rendered":"

[amp_mcq option1=”SLR” option2=”SBR” option3=”CBR” option4=”CLR” correct=”option1″]<\/p>\n

The correct answer is (a) SLR.<\/p>\n

SLR stands for Statutory Liquidity Ratio. It is the minimum amount of liquid assets that banks are required to hold in relation to their total deposits. The SLR is set by the Reserve Bank of India (RBI) and is currently at 18%.<\/p>\n

The SLR is designed to ensure that banks have enough liquidity to meet the demands of their customers. It also helps to control inflation by absorbing excess liquidity from the system.<\/p>\n

The SLR is a key tool in the RBI’s monetary policy toolkit. It is used to manage the money supply and to influence interest rates.<\/p>\n

The SLR is a controversial measure. Some argue that it is an unnecessary burden on banks and that it reduces their profitability. Others argue that it is an important tool for maintaining financial stability.<\/p>\n

The RBI has been gradually reducing the SLR in recent years. This is in line with the RBI’s objective of making the Indian financial system more efficient and competitive.<\/p>\n

The other options are incorrect.<\/p>\n

(b) SBR stands for Statutory Borrowing Requirement. It is the minimum amount of government securities that banks are required to hold.<\/p>\n

(c) CBR stands for Cash Reserve Ratio. It is the minimum amount of cash that banks are required to hold in their vaults.<\/p>\n

(d) CLR stands for Capital to Risk Assets Ratio. It is the minimum amount of capital that banks are required to hold in relation to their risk-weighted assets.<\/p>\n","protected":false},"excerpt":{"rendered":"

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