Statutory Liquidity Ratio

Subject :Economy

Section: Monetary Policy

Statutory Liquidity Ratio popularly called SLR is the minimum percentage of deposits that the commercial bank maintains through gold, cash and other securities. However, these deposits are maintained by the banks themselves and not with the RBI or Reserve Bank of India.
Section 24 and Section 56 of the Banking Regulation Act 1949 mandates all scheduled commercial banks, local area banks, Primary (Urban) co-operative banks (UCBs), state co-operative banks and central co-operative banks in India to maintain the SLR.

Assets held under SLR are ones that can easily be converted into cash, gold and SLR securities:

Dated securities
Treasury Bills of the Government of India;
Dated securities of the Government of India issued from time to time under the market borrowing programme and the Market Stabilization Scheme;
State Development Loans (SDLs) of the State Governments issued from time to time under the market borrowing programme
Any other instrument as may be notified by the Reserve Bank of India