[Solved] A high Statutory Liquidity Ratio (SLR)

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Q.	A high Statutory Liquidity Ratio (SLR)
A.	restricts lending
B.	increases supply of cash
C.	provides funds to the state
D.	increases the strength of the banks
Answer» A. restricts lending
Explanation: Statutory Liquidity Ratio refers to the amount that the commercial banks require tomaintain in the form gold or government approved securities before providing credit to the customers. An increase in SLR practically restricts lending, thus controlling credit in the country. In India, the RBI can increase the Statutory Liquidity Ratio to contain inflation, suck liquidity in the market, to tighten the measure to safeguard the customers' money.

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