STATUTORY LIQUIDITY RATIO

1. Statutory Liquidity Ratio is maintained as per section 24 of Banking Regulation Act.

2. As per amendment to section 24 of the Banking Regulation Act, the provision relating to maintenance of minimum SLR of 25% of NDTL has been withdrawn. Thus, RBI is free to fix minimum SLR. However, it can be increased to maximum of 40% of NDTL. RBI has decided to reduce the Statutory Liquidity Ratio'(SLR) to 18 per cent of their Net Demand and Time Liabilities (NDTL)

3. BLR can be kept in the form of (a) cash with bank (b) gold valued at a price not exceeding the current market price; (c) cash balance with other banks (d) excess cash balance with RBI; (e) Investments in SLR securities which includes Unencumbered Dated securities issued up to May 6, 2011; Treasury Bills of the Government of India; Unencumbered Dated securities of the Government of India issued from time to time under the market borrowing programme and the Market Stabilization Scheme; State Development Loans (SDLs) of the State Governments issued from time to time under the market borrowing programme;

4. For calculation of SLR, banks should send monthly statement on Form VIII under Section 24 of the B R Act.

5. If a bank fails to maintain BLR on any day of the fortnight, RBI will charge penal interest for that day at the rate of 3% per annum above the bank rate on the amount of shortfall. If the shortfall continues on the next succeeding day/s, penal interest will be recovered at a rate of five per cent per annum above the bank rate.