Distinguish between:Cash Reserve Ratio and Statutory Liquidity Ratio – InterviewSolution

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Distinguish between:Cash Reserve Ratio and Statutory Liquidity Ratio

Answer»

Basis	Cash Reserve Ratio	Statutory Liquidity Ratio
Meaning	It is the minimum amount of funds that a commercial bank has to maintain with the Reserve Bank of India in the form of deposits.	It is the minimum percentage of assets, such as gold, cash or securities, which must be maintained by the commercial banks with the Central Bank.
Affect	It affects the bank's capacity to lend.	It affects the bank’s liquidity.

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