Distinguish between CRR and SLR?

1.	Distinguish between CRR and SLR?
Answer» CRR: 1. The Central Bank controls credit by changing the Cash Reserves Ratio. 2. Commercial Banks have excessive cash reserves on the basis of which they are creating too much of credit, this will be harmful for the larger interest of the economy. 3. So it will raise the cash reserve ratio which the Commercial Banks are required to maintain with the Central Bank. SLR: 1. Statutory Liquidity Ratio (SLR) is the amount which a bank has to maintain in the form of cash, gold or approved securities. 2. The quantum is specified as some percentage of the total demand and time liabilities. 3. The liabilities of the bank which are payable on demand anytime, and those liabilities which are accruing in one month’s time due to maturity.

Answer»

CRR:

1. The Central Bank controls credit by changing the Cash Reserves Ratio.

2. Commercial Banks have excessive cash reserves on the basis of which they are creating too much of credit, this will be harmful for the larger interest of the economy.

3. So it will raise the cash reserve ratio which the Commercial Banks are required to maintain with the Central Bank.

SLR:

1. Statutory Liquidity Ratio (SLR) is the amount which a bank has to maintain in the form of cash, gold or approved securities.

2. The quantum is specified as some percentage of the total demand and time liabilities.

3. The liabilities of the bank which are payable on demand anytime, and those liabilities which are accruing in one month’s time due to maturity.

Discussion

No Comment Found

Related InterviewSolutions

Kamal deposits Rs 550 per month in a recurring deposit account for `1(1)/(2)` year at `8%` per annum. Find the interest that kamal will receive at the time of maturity.A. Rs. 550B. Rs. 627C. Rs. 230D. Rs. 346
Prabhu deposits Rs. 600 per month in a recurring deposit account for 1 year at `8%` per annum. Find the interest received by Prabhu.A. Rs. 424B. Rs. 312C. Rs. 360D. Rs. 450
Thsuhar opens a recurring deposit account with a bank and deposits Rs. 500 per month for `1(1)/(2)` years. If he receives Rs. 570 as interest, then find the rate of interest offered by the bank.
Subhash makes a fixedA. Rs. 65,010B. Rs. 11,810C. Rs. 62,310D. Rs. 12,100
Himesh opened a saving bank account with a bank on `3-6-2007` with Rs. 500. His transactions during june and July were as follows: `{:(,"Deposited Rs. 500 on 8-6-2007."),(,"Withdrew Rs. 300 on 11-6-2007."),(,"Deposited Rs.500 on 13-6-2007."),(,"Withdrew Rs.350 on 29-6-2007"),(,"Deposited Rs.500 on 3-7-2007."),(,"Diposited Rs. 500 on 12-7-2007."):}`
A Bank is a ……… (a) Financial institution (b) Corporate (c) An Industry (d) Service institutions
The State Financial Corporation Act was passed by ………… (a) Government of India (b) Government of Tamilnadu (c) Government of Union Territories (d) Local Government.
Write the meaning of Open market operations?
Monetary policy is formulated by …………(a) Co – operative banks (b) Commercial banks (c) Central Bank(d) Foreign banks
Which of the following is correctly matched.(a) CRR – Current Reserve Ratio (b) Saving deposits – Cheque facilities (c) Bank rate policy – High interest (d) Adviser to government – SBI