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CASH RESERVE RATIO (CRR)


The CRR refers to the cash which banks have to

maintain with the RBI as a certain percentage of their demand and time liabilities Every commercial bank has to keep certain minimum cash reserves with RBI. Consequent upon amendment to sub-Section 42(1), the Reserve Bank, having regard to the needs of securing the monetary stability in the country

Cont
CRR was fixed in respect of demand liabilities 5% &

time liabilities 2% The bank had powers to vary these ratios up to a maximum of 20% and 8% respectively

Statutory liquidity Ratio


Banks are required to maintain liquid assets in the

form of gold, cash and approved securities. Higher liquidity ratio forces commercial banks to maintain a larger proportion of their resources in liquid form and thus reduces their capacity to grant loans and advances, thus it is an anti-inflationary impact. A higher liquidity ratio diverts the bank funds from loans and advances to investment in government and approved securities

Statutory liquidity Ratio


Statutory Liquidity Ratio The Banking Regulation

Act 1962 provides for maintaining a minimum Statutory Liquidity Ratio (SLR) of 25% by the bank against their net demand and time liabilities.

Society for world wide inter banking fast Transfer (swift)


SWIFT is a computerized message system which links

banks around the world. They are aiming to improve the speed and service in order to present the individual banks setting up their own computerized messaging system in opposition. SWIFT is an important mode of trading in a foreign exchange market. It is an international bank communications network that links electronically all brokers and traders in foreign exchange