Which among the following are often described as Double Financial Repression for Banks in India?
Which among the following are often described as Double Financial Repression for Banks in India?
[A]Priority Sector Loans and Cash Reserve Ratio
[B]Priority Sector Loans and Statutory Liquidity Ratio
[C]Cash Reserve Ratio and Statutory Liquidity Ratio
[D]Statutory Liquidity Ratio and Margin Requirements
Priority Sector Loans and Statutory Liquidity Ratio
Priority Sector lending in India has been made a salient feature of the banking in India mainly due to the social and economic objectives that underlie PSL. However, banks are also required to keep certain amount to maintain Statutory Liquidity Ratio ( SLR) and from the remaining disposable amount, 40 per cent is dedicated for the priority sector. Thus, large fraction of banks’ resources cause the so called “Double Repression” on the banking system.