Statutory Liquidity Ratio (SLR) in India: Balance-Sheet Impact, Credit Transmission, and Macroeconomic Effects

Reserve Bank Functions and news

The Statutory Liquidity Ratio (SLR) requires banks to hold a minimum share of Net Demand and Time Liabilities in liquid assets such as cash, gold, and government securities, shaping banks’ balance sheets, credit supply, and interest rates while supporting financial stability and government debt markets. A higher SLR restrains bank lending capacity and can firm…

Cash Reserve Ratio (CRR) in India: Transmission, Bank Balance Sheets, and Macroeconomic Impact

Reserve Bank Functions and news, Uncategorized

The Cash Reserve Ratio (CRR) is a core liquidity tool of the Reserve Bank of India (RBI) that directly alters banks’ lendable resources, influences interest rates and credit growth, and transmits into inflation and output dynamics in the wider economy. Higher CRR tightens liquidity and credit conditions, while lower CRR releases primary liquidity, supporting credit…