Question

If statutory liquidity ratio increases then waht happns to interest rates?

Answer 1

Answer:

Controlling the expansion of bank credit. ... By reducing the level of SLR, the RBI can increase liquidity with the commercial banks, resulting in increased investment. This is done to fuel growth and demand. Compelling the commercial banks to invest in government securities like government bonds.

Answer 2

Answer:

By changing the level of SLR, the Reserve Bank of India can increase or decrease bank credit expansion. Ensuring the solvency of commercial banks. By reducing the level of SLR, the RBI can increase liquidity with the commercial banks, resulting in increased investment. This is done to fuel growth and demand.

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