RBI all set for the Statutory liquidity ratio (SLR) cut for future planning

Reserve Bank of India has lowered statutory liquidity ratio (SLR) by 50 basis points and told banks to prepare themselves for higher credit growth when the economy picks up.

Governor Raghuram Rajan said that the reduction in SLR might not spur credit growth immediately but it would enable banks to meet credit demand whenever necessary.

“SLR cut is more about planning rather than immediate effect,”

RBI lowered SLR of scheduled commercial banks to 22% of net demand and time liabilities (NDTL) with effect from the fortnight beginning August 9, 2014. SLR is the amount that the commercial banks require to keep in the form of gold or government approved securities before providing credit to the customers. At present banks are required to keep aside 22.5% of their deposits in SLR.He pointed out that improving government finance is creating expectation of an early demand pick up.
RBI said that the regulatory pre-emption such as SLR has been reduced as banks are entering a more competitive environment.

profile image

About eMinds Legal

eMinds Legal

eMinds Legal is a Corporate Law Firm based in Gurgaon, India specializing in Corporate Legal, Corporate Secretarial and Compliance. The Firm comprises of a team of Corporate Lawyers and Company Secretaries with in-depth subject matter knowledge and participative industry experience of over 15 years.

Leave a Reply

Your email address will not be published. Required fields are marked *

India’s Leading Compliance Software

India’s Leading Compliance Software

Get A Demo Today !

Corporate Law Referencer

Corporate Law Referencer

Corporate Law Referencer

Recent Articles

Recent Legal updates

Recent Gst Updates