Skip to content

CMA Foundation · Fundamentals of Business Economics and Management · Money and Banking

A bank has Net Demand and Time Liabilities (NDTL) of ₹800 crore. The RBI requires CRR of 4% and SLR of 18%. Ignoring all other regulations, how much of the NDTL must the bank hold as liquid assets in the form of SLR securities, and how much is left of the ₹800 crore for lending and other uses after meeting both CRR and SLR?

SLR securities required are 18% of ₹800 crore, which is ₹144 crore. CRR is 4%, or ₹32 crore. Together ₹176 crore is locked, leaving ₹624 crore for lending and other uses. Ignoring CRR would wrongly give ₹656 crore.

  1. ASLR securities ₹144 crore; amount left ₹624 croreCorrect
  2. BSLR securities ₹176 crore; amount left ₹592 crore
  3. CSLR securities ₹144 crore; amount left ₹656 crore
  4. DSLR securities ₹32 crore; amount left ₹768 crore

Explanation

CRR = 4% of 800 = ₹32 crore (kept with RBI in cash). SLR = 18% of 800 = ₹144 crore. Total locked = 32 + 144 = ₹176 crore, so the amount left = 800 − 176 = ₹624 crore. The option showing ₹656 crore subtracts only the SLR and forgets CRR.

Did you get it right without looking?

One question tells you little. A timed set on Money and Banking shows your real accuracy, how long you take and where you lose marks.

Practise Money and BankingFree diagnostic mock

More Money and Banking questions