Banking Awareness - Basics Of Banking & Banking Terminology
Which term refers to the statutory requirement that restricts banks from lending their entire deposits?
Which term refers to the statutory requirement that restricts banks from lending their entire deposits?
medium Q6 of 15
Step-by-Step Solution
Step 1: Identify lending restriction
The question refers to a statutory limit on lending.Step 2: Recall statutory ratios
SLR restricts banks by mandating liquid asset maintenance.Final Answer:
SLR → Option BQuick Check:
SLR limits how much banks can lend ✅
Quick Trick: Statutory lending limit = SLR.
Common Mistakes:
- Attributing lending limits only to CRR.
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