App Logo

No.1 PSC Learning App

1M+ Downloads
The requirement of commercial banks to keep a specified portion of their NDTL (Net Demand & Time Liability) in liquid assets is called

ASLR

BCRR

CRepo Rate

DReverse Repo Rate

Answer:

A. SLR

Read Explanation:

DIRECT INSTRUMENTS OF MONETARY POLICY OF RBI:


1. CRR (Cash Reserve Ratio)

  •  It is the certain percentage of net demand and time liability (NDTL) of banks that must be maintained with RBI.
  • The refinance fund from NABARD, SIDBI, RBI are exempted from CRR provision.
  • There is a penal charge for not maintaining CRR at the rate of 3%.


2. SLR (Statutory Liquidity Ratio):

  • It is a requirement that, commercial banks have to keep a specified portion of their NDTL (Net Demand & Time Liability) in liquid assets.
  • SLR is maintained in the form of cash, gold or bond (govt. security).
  • Penal charge for not maintaining CRR, SLR is 3%.


3. Refinance Facility:

  • RBI provides refinance facility which includes foreign exchange and currency swap facility.
  • Swap is a derivative contract for exchange of one instrument for another.
  • In RBI currency swap, RBI buys foreign currency and release equivalent amount in Indian Rupee in Indian market.

Related Questions:

First Indian Governor of RBI at the time of RBI Nationalisation
At the time of inflation, RBI --- reverse repo rate.
The First Central Bank in the world
A derivative contract for exchange of one instrument for another is called
The First Chief Financial Officer of RBI