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UPSC Economics Business and Foreign Trade / व्यापार और विदेश व्यापार Question Bank Money Supply and Indian Financial System

  • question_answer
          Consider the following statements with regard to
    Statutory Liquidity Ratio (SLR):
    1. To meet SLR, Commercial banks can use cash only.
    2. SLR is maintained by the banks with themselves.
    3. SLR restricts the bank?s leverage in pumping more money into the economy.
    Which of the statements given above is/are correct?

    A) 1, 2 and 3                     

    B) 1 and 3

    C) 2 and 3           

    D)        only 2

    Correct Answer: C

    Solution :

    SLR used by bankers indicates the minimum percentage of deposits that the banks have to maintain in the form of gold, cash or other approved securities.


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