Distinguish between CRR and SLR.

1.	Distinguish between CRR and SLR.
Answer» CRR is the fraction of the deposits which commercial banks are required under law to keep as cash reserves, with the central bank. CRR is a powerful instrument to control credit and lending capacity of the banks. SLR is a part of deposits which Commercial Banks have to keep with themselves. Banks are required to keep a fixed percentage of its assets in cash, gold or other securities. SLR is raised to reduce the ability, of the banks to give credit.

Answer»

CRR is the fraction of the deposits which commercial banks are required under law to keep as cash reserves, with the central bank. CRR is a powerful instrument to control credit and lending capacity of the banks.

SLR is a part of deposits which Commercial Banks have to keep with themselves. Banks are required to keep a fixed percentage of its assets in cash, gold or other securities. SLR is raised to reduce the ability, of the banks to give credit.

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Distinguish between CRR and SLR.

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