what is legal reserve ratio and also explain CRR and SLR.....
explain in details plzz
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legal reserve ratio has two variant:
(i) cash reserve ratio and,(ii) statutory liquidity ratio.
Cash reserve ratio (CRR): it refer to cash reserves of commercial banks with the central bank as a percentage of their deposit.
Statutory liquidity ratio (SLR): it refer to reserve in the form of liquid asset ( including (i) cash, (ii) gold, and (iii) approsecurity) with the commercial bank themselves as a percentage of their total deposits.
both CRR and SLR are fixed by the Central Bank, and both are legal binding for the commercial bank. in the sense, both CRR and SLR are legal reserve ratio
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