UPSC Prelims 1998 · General Studies
Question 76: Economy and Social Development
The banks are required to maintain a certain ratio between their cash in hand and total assets. This is called
AnswerThe answer is (b).
The Statutory Liquidity Ratio (SLR) is the share of a bank's net demand and time liabilities that it must hold in liquid assets such as cash, gold and approved government securities, as fixed by the RBI. The option spells it out as 'Statutory Liquid Ratio', and the question describes it loosely as a ratio of cash to assets, but it is the closest. The CRR is the cash a bank keeps with the RBI. SBR, CBR and CLR are not real terms.
Why each option is right or wrong
- (a) SBR is not a real banking term.
- (b) Right: SLR is the required liquid-asset ratio.
- (c) CBR is not a real banking term.
- (d) CLR is not a real banking term.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 1998, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.