What is Statutory Liquidity Ratio (SLR)?

As per Section 24 (2A) of Banking Regulation Act 1949, every banking company in India has to maintain equivalent to an amount which shall not at the close of the business on any day be less than 25% of the total of its net demand and time liabilities. The components of SLR are 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.