Question

Legal service ratio is equal to,

•CRR/SLR
•CRR – SLR
•SLR – CLR
•CRR + SLR​

Answer 1

Answer:

CRR + SLR​

Explanation:

• The legal reserve ratio is the minimum percentage of deposits that banks are required to retain as cash. The central bank sets the legal reserve ratio. The Legal Reserve Ratio is made up of two parts:
• The Cash Reserve Ratio (CRR) is a measure of a commercial bank's cash reserves with the central bank as a proportion of its deposits.
• The Statutory Liquidity Ratio (SLR) refers to the Commercial Banks' reserves in the form of liquid assets (including I cash, (ii) gold, and (iii) permitted securities) as a proportion of total deposits.
• The Central Bank sets both the CRR and the SLR, and both are legally enforceable on Commercial Banks. Both CRR and SLR are lawful reserve ratios in this sense.
• CRR + SLR equals legal service ratio. ​

Answer 2

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