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RAS question

The current SLR rate is:

Correct answer: (C) 18%.

The current Statutory Liquidity Ratio, or SLR, is 18.00% according to the Reserve Bank of India's Current Rates table.

  1. (A)

    21%

  2. (B)

    23%

  3. (C)

    18%

  4. (D)

    15%

Explanation

SLR stands for Statutory Liquidity Ratio, a statutory reserve-ratio requirement for banks. The RBI's official Current Rates section lists reserve ratios separately from policy rates, and under that head it shows SLR at 18.00%. SLR has been reduced over time with the aim of increasing banks' lending capacity, so older higher figures should not be treated as the present rate. The current RBI-listed reserve-ratio figure is 18.00%, not a past SLR level or a different monetary-policy rate.

Why the other options are wrong

  • (A) 21% is an older SLR rate, while the RBI's current reserve-ratio table shows SLR at 18.00%.
  • (B) 23% is too high for the present rate because SLR has been reduced over time, and the RBI currently lists it as 18.00%.
  • (D) 15% is below the RBI-listed current SLR figure of 18.00%, so it understates the present reserve-ratio requirement.

Concept

The Indian Economy syllabus covers monetary policy instruments, especially statutory reserve ratios. SLR recurs in RAS because SLR, CRR and policy-rate changes directly affect bank liquidity and lending capacity.

Source

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