Statutory Liquidity Ratio (SLR)

The banks and other financial institutions in India have to keep a fraction of their total net time and demand liabilities in the form of liquid assets such as G-secs, precious metals, approved securities etc. The Ratio of these liquid assets to the total demand and time liablities is called Statutory Liquidity Ratio. This ratio was prescribed by the Section 24 (2A) of Banking Regulation Act 1949, which initially mandated for a 23% SLR.

Components of SLR

Components of SLR include cash in hand, gold owned by the bank, balance with RBI, Net balance in current account & Investment in Government securities. SLR has to be maintained at the close of business on every day.

Current SLR

The SLR was very high in the 1980s, and highest in first two year of 1990s, when the first Narsimham Committee recommended to bring it down from 38.5% to 25%. At present, the SLR is 21.5% (February 2015)

Difference between CRR and SLR

CRR and SLR have been the traditional instruments of Reserve Bank of India’s monetary control policy. CRR indicates the quantum of cash that banks are required to keep with the Reserve Bank as a proportion of their net demand and time liabilities (NDTL). SLR prescribes the amount of money that banks must invest in securities issued by the government. This is not kept with RBI but with banks themselves.

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  25. prem singh chauhan

    August 1, 2012 at 1:02 pm

    current SLR(statutory liquidity raito) rate is 23% as announced by RBI governor D.Subbarao on 31st July 2012 and the minimum limit for it is 23% since 2007 and maximum limit is 40% as mentioned above.
    Hope this information would be helpful for you and kindly correct me ,if i’m wrong

    Reply
  26. Karan

    August 4, 2012 at 11:23 am

    SLR is now 23% asannounced by RBI.Our blog is updated till Feb2012.soon we will correct it.

    Reply
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  28. sushant kharate

    December 22, 2012 at 2:32 pm

    but slr has limit up to 25 to 40 % s it right?

    Reply
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  34. Mahfooz

    April 23, 2013 at 11:26 pm

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    April 26, 2013 at 7:53 pm

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    June 19, 2013 at 5:44 pm

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  38. Mahendra kumar

    April 14, 2015 at 7:11 am

    Here is double rates of SLR wht is right at present
    21.5% Or 23%
    Plz tell me immdtly.

    Reply
  39. bijoy

    July 7, 2015 at 4:45 pm

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