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