Ad Here  
Small finance banks offer high interest rates Cut in repo rate – lower than expected Thirty more cities seek to become SMART Why any time money? Two banks: their jubilees and performances Smart banking in smart cities How okay are new banks? LVB- A supermarket of financial services How ‘secure’ are the secured loans? Banking in Telangana One down in private sector Small finance payment banks... Cradle of banks to a smart city... Greet Lakshmi the banking robot Merger mania haunts banks Monetary policy continues to adopt dis-inflationary path Mega merger is on Cautious and considerate Well-lived... Reaching the Unreached… Grows Bigger New capitals of Migrant banks Big bank merger, bigger expectations Ernakulam excels... What is the priority – mergers or NPA reduction? New bank licences, at last... Rationalised Lacklustre credit expansion Indian customers are tech savvy Small is ‘more’ beautiful Managing NPAs... Just 660 days! Target over-ambitious... From lazy banking to easy banking Capital base of regional rural banks raised It’s a war on black money, support it. Growing volume of stressed assets… Banking overhauling or reorganisation? United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Bottomlines shrink, bad loans rise... Why priority status? Who is the real beneficiary? Targets continue to be ad hoc Banking on Risk A development bank for BRICS Aadhaar, niraadhaar and banking The paradox: clamour for the Goliath and David Reaching out: is it slowing down? Bank deposits account for 46.3 per cent of household savings Good, bad and ugly A new development bank rising in the east… Stage set for Indian ‘avatar’ of foreign banks Growing gainfully Too big to fail and too small to sail Nothing much can happen…. A bank for women, by women The collaboration suite of cyber criminals Insatiable appetite for credit Needed a Banking Atlas Payment banks have arrived Financial inclusion vs unclaimed deposits Anytime banking to anywhere banking Emerging crisis Perhaps small is more beautiful than big! Drop in SLR- sparing lendable resources Holy or unholy? Fund healthcare clinics in villages... Hesitancy in announcing year-end results Governance in Reverse Gear? Another route for achieving financial inclusion Drastic decline in asset quality Ferrying digital banking to Lakshadweep All that glitters is not gold...
Drop in SLR- sparing lendable resources

Strictly monitoring the Statutory Liquidity Ratio (SLR) to be maintained by all banks, the Reserve Bank of India has been using one of the age-old monetary control mechanisms, almost since its inception. In the Second Bi-monthly Monetary Statement of 2014-15, Governor of Reserve Bank of India has “reduced the SLR of scheduled commercial banks by 50 basis points from 23.0 per cent to 22.5 per cent of their Net Demand and Time Liabilities (NDTL) with effect from the fortnight beginning 14 June, 2014.”  By this gesture, the lendable resources of the banking system would be increased by about Rs 40,000 crore.

Reserve Bank of India has been empowered to use the SLR mechanism to impound up to 40 per cent of the demand and time liabilities – namely total deposits - of commercial banks. At one time - in September 1990- it was as high as 38.50 per cent. Banks have become over the years a captive source for investing in government securities whenever the SLR is raised. Spendthrift state governments easily raise funds through this process from banks and they are euphemistically called public debt. A gradual reduction in the SLR is desirable to curtail deficit financing in state budgets. Similarly it is necessary to examine the need for stipulating a more reasonable level for Cash Reserve Ratio (CRR). The central bank can raise it up to 15 per cent, if required. In the past, when bank failures were common, a high CRR was an expedient safety measure. It was 9 per cent in 2008. It has been gradually brought down to 4 per cent at present.

Author :
Reported On :
Sector :
Shoulder :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236