Question: Is SLR And LRR Same?

What is the SLR and CRR?

CRR or cash reserve ratio is the minimum proportion / percentage of a bank’s deposits to be held in the form of cash.

SLR or statutory liquidity ratio is the minimum percentage of deposits that a bank has to maintain in form of gold, cash or other approved securities..

What is the other name of LRR?

Long-range shooting–organized or otherwise–has always been an equipment race and the modern LRR systems lend versatility rather than bypass it….LRR.AcronymDefinitionLRRLegal Recovery Resource (Georgia)29 more rows

What is the money multiplier formula?

Given the following, calculate the M1 money multiplier using the formula m 1 = 1 + (C/D)/[rr + (ER/D) + (C/D)]. Once you have m, plug it into the formula ΔMS = m × ΔMB. So if m 1 = 2.6316 and the monetary base increases by $100,000, the money supply will increase by $263,160.

What is MSF rate?

MSF rate is the rate at which banks borrow funds overnight from the Reserve Bank of India (RBI) against approved government securities. … Under the Marginal Standing Facility (MSF), currently banks avail funds from the RBI on overnight basis against their excess statutory liquidity ratio (SLR) holdings.

Why is SLR maintained?

SLR is used to control the bank’s leverage for credit expansion. The Central Bank controls the liquidity in the Banking system with CRR. In the case of SLR, the securities are kept with the banks themselves, which they need to maintain in the form of liquid assets.

What is the purpose of CRR and SLR?

Through CRR, the RBI controls excess money flow in the economy whereas the SLR requirement ensures meeting out the unexpected demand of any depositor by selling the bonds. In short, CRR helps to regulate liquidity while SLR regulates credit growth in the economy.

Is LRR and CRR same?

SLR is concerned with maintaining the minimum reserve of assets with RBI, whereas the cash reserve ratio is concerned with maintaining cash balance (reserve) with RBI. … So, LRR is not equal to CRR and SLR.

Is LRR sum of CRR and SLR?

Is it the sum of Cash Reserve Ratio(CRR) and Statutory Liquidity Ratio(SLR)? … The aggregate of CRR and SLR is not equal to LRR.

What is meant by LRR?

LRR (Legal Reserve Ratio) refers to that legal minimum fraction of deposits which the banks are mandate to keep as cash with themselves. … Both CRR and SLR are fixed by the Central Bank, and both are a legal binding for the Commercial Banks.

How do you calculate LRR?

Value of money multiplier = 1/LRR which is equal to 1/0.1 = 10 Initial deposit was Rs. 500 crores Hence Total Deposit will be Initial Deposit × Money Multiplier = 500 ×10 = 5000 Crores 4 Page 5 Q17. Calculate LRR, if initial deposit of Rs. 200 crores lead to creation of total deposits of Rs.

What are the components of LRR?

The two components of LRR are Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).

What is the current SLR in India?

18.50%RBI Monetary Policy TodayIndicatorCurrent RateSLR18.50%Repo Rate4.00%Reverse Repo Rate3.35%Marginal Standing Facility Rate4.25%2 more rows