{"id":1973,"date":"2024-03-30T15:00:47","date_gmt":"2024-03-30T09:30:47","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1973"},"modified":"2024-04-03T07:05:52","modified_gmt":"2024-04-03T01:35:52","slug":"q-in-the-context-of-indian-economy-which-of-the-following-is-are-the-purpose-purposes-of-statutory-reserve-requirements","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-in-the-context-of-indian-economy-which-of-the-following-is-are-the-purpose-purposes-of-statutory-reserve-requirements","title":{"rendered":"Q. In the context of Indian economy, which of the following is\/are the purpose\/purposes of \u2018Statutory Reserve Requirements\u2019?"},"content":{"rendered":"\n<ol class=\"wp-block-list\">\n<li>To enable the Central Bank to control the amount of advances the banks can create<\/li>\n\n\n\n<li>To make the people\u2019s deposits with banks safe and liquid<\/li>\n\n\n\n<li>To prevent the commercial banks from making excessive profits<\/li>\n\n\n\n<li>To force the banks to have sufficient vault-cash to meet their day-to-day requirements<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Select the correct answer using the code given below.<\/p>\n\n\n\n<ul class=\"mcq wp-block-list\">\n<li>1 only<\/li>\n\n\n\n<li>1 and 2 only<\/li>\n\n\n\n<li>2 and 3 only<\/li>\n\n\n\n<li>1, 2, 3 and 4<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer: (a) 1 only<\/strong><\/p>\n<\/blockquote>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"statutory-reserve\"><strong>Statutory Reserve<\/strong>:<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Statutory Reserve is the amount of money, securities, or assets that need to be set aside as a legal requirement by insurance companies and financial institutions to cover claims or obligations due shortly. It is a mandatory reserve since the Government does not want to take chances if an insurance company fails to make payments for the insured peril.<\/li>\n\n\n\n<li>It is a legal reserve that must be maintained by the standards set by the regulating body for the sector, which may vary from country to country. The primary aim of maintaining a statutory reserve is for the organization to meet its obligations promised to its customers even if it is running into losses.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lotusarise.com\/wp-content\/uploads\/2024\/03\/Statutory-Liquidity-Ratio-SLR-1024x502.png\" alt=\"Statutory Liquidity Ratio (SLR)\" class=\"wp-image-50418\" title=\"Upsc prelims research: indian economy 2014 2\"\/><\/figure>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"statutory-liquidity-ratio-slr\"><strong>Statutory Liquidity Ratio (SLR)<\/strong><\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Statutory Liquidity Ratio (SLR)<\/strong>&nbsp;is the&nbsp;<strong>minimum percentage of deposits that a commercial bank must keep in liquid cash, gold, or other securities<\/strong>. It\u2019s essentially the reserve requirement that banks must meet before they may extend credit to customers.\n<ul class=\"wp-block-list\">\n<li><strong>Section 24 (2A) of the Banking Regulation Act of 1949 established the Statutory Liquidity Ratio (SLR).<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>This asset can be in the form of the following:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Cash<\/li>\n\n\n\n<li>Gold valued at a price not exceeding the current price<\/li>\n\n\n\n<li>Government securities and Treasury Bills<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Objectives of Statutory Liquidity Ratio<\/strong>\n<ul class=\"wp-block-list\">\n<li>To control bank credit, changing SLR would change the bank credit availability.<\/li>\n\n\n\n<li>In the case of the solvency of commercial banks, it will help in repaying stakeholders.<\/li>\n\n\n\n<li>Changing SLR indicates the macroeconomic conditions and what to expect from other instruments of monetary policy.<\/li>\n\n\n\n<li>By making banks invest in government securities the government has enough financial resources.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lotusarise.com\/wp-content\/uploads\/2024\/03\/NET-DEMAND-TIME-LIABILITIES-NDTL-1024x422.png\" alt=\"NET DEMAND &amp; TIME LIABILITIES (NDTL)\" class=\"wp-image-50417\" title=\"Upsc prelims research: indian economy 2014 3\"\/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Select the correct answer using the code given below. Answer: (a) 1 only Statutory Reserve: Statutory Liquidity Ratio (SLR)<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[59],"class_list":["post-1973","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-59"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":59,"label":"2014"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1973"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1973\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1973"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}