{"id":11272,"date":"2026-01-03T07:49:26","date_gmt":"2026-01-03T07:49:26","guid":{"rendered":"https:\/\/goldenpi.com\/blog\/?p=11272"},"modified":"2026-04-15T07:04:48","modified_gmt":"2026-04-15T07:04:48","slug":"what-is-statutory-liquidity-ratio","status":"publish","type":"post","link":"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/","title":{"rendered":"What is the Statutory Liquidity Ratio (SLR)?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The RBI uses various monetary policy tools to regulate liquidity, control credit flow and maintain stability in the banking system. The Statutory liquidity ratio (SLR) is one such tool. SLR requires banks to keep a certain portion of their money in liquid assets to maintain liquidity.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this article, we explore the meaning of Statutory Liquidity Ratio in detail, assessing it\u2019s key objectives, components, and uses to understand why this monetary tool is important to regulate the Indian economy.\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#What_is_Statutory_Liquidity_Ratio_SLR\" >What is Statutory Liquidity Ratio (SLR)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#Objectives_of_SLR\" >Objectives of SLR<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#Components_of_SLR\" >Components of SLR<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#1_Liquid_Assets\" >1. Liquid Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#2_Net_Demand_and_Time_Liabilities_NDTL\" >2. Net Demand and Time Liabilities (NDTL)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#How_is_the_SLR_Rate_for_Banks_Calculated\" >How is the SLR Rate for Banks Calculated?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#Uses_of_Statutory_Liquidity_Ratio_SLR\" >Uses of Statutory Liquidity Ratio (SLR)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#What_Happens_If_SLR_Is_Not_Maintained\" >What Happens If SLR Is Not Maintained?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#Difference_Between_SLR_and_CRR\" >Difference Between SLR and CRR<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#Conclusion_SLR_As_Key_for_Credit_Flow_Management\" >Conclusion: SLR As Key for Credit Flow Management<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#FAQs_on_Statutory_Liquidity_Ratio_SLR\" >FAQs on Statutory Liquidity Ratio (SLR)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#1_What_is_the_current_SLR_rate_in_India\" >1. What is the current SLR rate in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#2_What_is_the_purpose_of_SLR\" >2. What is the purpose of SLR?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#3_Who_decides_SLR\" >3. Who decides SLR?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#4_How_is_SLR_calculated\" >4. How is SLR calculated?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#5_What_is_the_impact_of_SLR_on_the_economy\" >5. What is the impact of SLR on the economy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#6_When_did_RBI_set_SLR_to_18\" >6. When did RBI set SLR to 18%?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/goldenpi.com\/blog\/essentials\/what-is-statutory-liquidity-ratio\/#7_What_is_Statutory_Liquidity_Ratio_in_2026\" >7. What is Statutory Liquidity Ratio in 2026?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Statutory_Liquidity_Ratio_SLR\"><\/span><b>What is Statutory Liquidity Ratio (SLR)?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The Statutory <a href=\"https:\/\/goldenpi.com\/blog\/sovereign-gold-bond\/how-do-sovereign-gold-bonds-offer-liquidity-to-investors\/\">Liquidity<\/a> Ratio or SLR represents the share of a bank\u2019s total deposits which must be set aside in approved liquid assets in line with RBI regulations.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As per RBI guidelines, these liquid assets may be maintained in:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cash held by the bank<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gold, valued at a price not exceeding the current market value<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unencumbered investments in approved securities, including central and state government securities notified by the RBI<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">SLR is expressed in percentage terms and is calculated on the Net Demand and Time Liabilities (NDTL) of a bank, which include savings accounts, current accounts and fixed deposit balances.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Currently, the SLR rate in India is 18%, meaning banks must keep 18% of their total deposits in liquid assets. The RBI has set 40% as the maximum permissible SLR limit.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Objectives_of_SLR\"><\/span><b>Objectives of SLR<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The Statutory Liquidity Ratio is a monetary policy tool and serves the following objectives:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Repay deposits: <\/b><span style=\"font-weight: 400;\">The chief objective of SLR is to maintain adequate liquid funds to repay public deposits even during times of crisis.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Preventing sudden asset liquidation:<\/b><span style=\"font-weight: 400;\"> The SLR requirement ensures banks do not liquidate their liquid holdings when the RBI increases the CRR, helping maintain financial stability.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Controlling credit flow:<\/b><span style=\"font-weight: 400;\"> The Statutory Liquidity Ratio is used by the RBI to regulate how much credit banks can lend out. This helps control credit flow into the economy.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Encouraging investment in government securities:<\/b><span style=\"font-weight: 400;\"> Because SLR includes investing in approved securities, it helps promote bank investments in government bonds.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Ensuring bank solvency:<\/b><span style=\"font-weight: 400;\"> By making banks invest a portion of their liquid funds into government securities, SLR aims to strengthens their financial solvency.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Supporting government debt management:<\/b><span style=\"font-weight: 400;\"> SLR also assists the government in raising funds by creating a steady investor base for its securities, aligning with RBI\u2019s monetary policy objectives.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Components_of_SLR\"><\/span><b>Components of SLR<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The Statutory Liquidity Ratio is divided into two key components:\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_Liquid_Assets\"><\/span><b>1. Liquid Assets<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Liquid assets are those that can be easily converted into cash with minimal loss in value. As prescribed by the RBI, these include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cash reserves held by banks<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gold valued at or below prevailing market prices<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Government of India dated securities<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Treasury Bills issued by the central government<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">State Development Loans (SDLs)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Securities issued under the Market Borrowing Programme<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Instruments notified under the Market Stabilisation Scheme<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"2_Net_Demand_and_Time_Liabilities_NDTL\"><\/span><b>2. Net Demand and Time Liabilities (NDTL)<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Under the Statutory liquidity ratio (SLR) framework, Net Demand and Time Liabilities (NDTL) represent the total deposits and liabilities a bank owes to its customers and other institutions. NDTL includes:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Demand liabilities:<\/b><span style=\"font-weight: 400;\"> Savings account balances, current account deposits, and overdue fixed deposits that can be withdrawn on demand.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Time liabilities: <\/b><span style=\"font-weight: 400;\">Fixed deposits, recurring deposits, and certificates of deposit that are repayable only after a fixed maturity period.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"How_is_the_SLR_Rate_for_Banks_Calculated\"><\/span><b>How is the SLR Rate for Banks Calculated?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The Statutory liquidity ratio (SLR) is expressed as a percentage of the Net Demand and Time Liabilities (NDTL) of a bank. The following formula is used to measure how much SLR a bank currently has:<\/span><\/p>\n<div class=\"pcrstb-wrap\"><table>\n<tbody>\n<tr>\n<td><span style=\"font-weight: 400;\">SLR rate = (Liquid assets \u00f7 Net Demand and Time Liabilities) \u00d7 100<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<p><span style=\"font-weight: 400;\">Let\u2019s take an example to understand this better. Let\u2019s assume a bank has<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>NDTL:<\/b><span style=\"font-weight: 400;\"> \u20b92,000 crore<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Liquid assets:<\/b><span style=\"font-weight: 400;\"> \u20b9320 crore (\u20b980 crore in cash, \u20b9160 crore in government securities and \u20b980 crore in gold)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">As of 17th December 2025, the SLR rate set by RBI is at 18%. In this case, the minimum liquid assets required would be:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u20b91,500 crore \u00d7 18% = \u20b9270 crore<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, calculate the bank\u2019s current SLR:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">(\u20b9300 crore \u00f7 \u20b91,500 crore) \u00d7 100 = 20%<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since the bank\u2019s Statutory Liquidity Ratio is higher than the required 18%, it complies with RBI guidelines and maintains adequate liquidity.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Uses_of_Statutory_Liquidity_Ratio_SLR\"><\/span><b>Uses of Statutory Liquidity Ratio (SLR)<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The Statutory liquidity ratio (SLR) is an important monetary <a href=\"https:\/\/goldenpi.com\/blog\/essentials\/rbis-status-quo-no-changes-in-current-policy\/\">policy<\/a> tool used by the RBI to regulate liquidity and maintain stability in the banking system. Its key uses include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Ensuring bank solvency<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">By requiring banks to maintain a minimum level of liquid assets, SLR helps keep banks financially stable and reduces the risk of liquidity stress.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Promoting investment in safe assets<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">SLR encourages banks to invest in approved government securities, gold and other low-risk instruments specified by the RBI.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Controlling inflation and credit growth<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">When the RBI increases the SLR, banks have fewer funds available for lending, which helps control excessive credit expansion and inflation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Supporting economic growth during slowdowns<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">When the SLR is reduced, banks can lend more, improving cash flow and supporting spending and investment during periods of economic slowdown.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"What_Happens_If_SLR_Is_Not_Maintained\"><\/span><b>What Happens If SLR Is Not Maintained?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As per Section 24 and Section 56 of the Banking Regulation Act of 1949, all scheduled commercial banks (including co-operative banks) have to maintain the RBI\u2019s prescribed Statutory Liquidity Ratio threshold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Failure to comply can lead to the following consequences:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Penal interest:<\/b><span style=\"font-weight: 400;\"> RBI may impose penalty interest on the shortfall amount.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Regulatory action:<\/b><span style=\"font-weight: 400;\"> Persistent non-compliance can result in the RBI imposing operational restrictions on core banking operations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Loss of depositor confidence:<\/b><span style=\"font-weight: 400;\"> Liquidity shortfalls may raise concerns about a bank\u2019s financial stability.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Difference_Between_SLR_and_CRR\"><\/span><b>Difference Between SLR and CRR<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Most people get confused between SLR and CRR. Although both are liquidity control tools of the RBI, SLR and CRR differ in structure and purpose. Let\u2019s review their differences in detail:<\/span><\/p>\n<div class=\"pcrstb-wrap\"><table>\n<tbody>\n<tr>\n<td><b>Aspect<\/b><\/td>\n<td><b>SLR<\/b><\/td>\n<td><b>CRR<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Meaning<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Deposits held in liquid assets<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Deposits held as cash<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Authority<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Held by the bank<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Held with RBI<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Asset type<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Cash, gold, government securities<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Cash only<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Interest earned<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Yes<\/span><\/td>\n<td><span style=\"font-weight: 400;\">No<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Objective<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Credit control and maintaining the bank\u2019s solvency<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Regulate liquidity in the economy<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion_SLR_As_Key_for_Credit_Flow_Management\"><\/span><b>Conclusion: SLR As Key for Credit Flow Management<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">To sum up, the Statutory Liquidity Ratio (SLR) is essentially the mandatory level of liquid asset investments banks need to make to ensure stability, manage credit flow and meet depositor obligations. Understanding the meaning of SLR, its objectives, components and importance helps explain how the RBI balances liquidity and inflation in the banking system.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019re also looking to invest in fixed-income securities, you can head to the <\/span><a href=\"https:\/\/goldenpi.com\/\"><span style=\"font-weight: 400;\">GoldenPi<\/span><\/a><span style=\"font-weight: 400;\"> platform. Here, you can review bank and corporate FDs, bonds, and NCDs, compare options, and choose ones that match your goals!\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs_on_Statutory_Liquidity_Ratio_SLR\"><\/span><b>FAQs on Statutory Liquidity Ratio (SLR)<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"1_What_is_the_current_SLR_rate_in_India\"><\/span><b>1. What is the current SLR rate in India?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">As of 17th December 2025, the Statutory Liquidity Ratio rate in India 18%. However, this rate is subject to change as per RBI\u2019s policy changes.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_What_is_the_purpose_of_SLR\"><\/span><b>2. What is the purpose of SLR?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The purpose of SLR is to regulate credit flow in the economy, and ensure banking stability. It is also critical in helping banks maintain financial liquidity to meet depositor withdrawal demands.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Who_decides_SLR\"><\/span><b>3. Who decides SLR?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The Reserve Bank of India determines and revises the SLR rate.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_How_is_SLR_calculated\"><\/span><b>4. How is SLR calculated?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">SLR is calculated as liquid assets divided by Net Demand and Time Liabilities (NDTL)<\/span><span style=\"font-weight: 400;\">.<\/span><span style=\"font-weight: 400;\"> The following formula is used to calculate SLR:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">SLR = [Liquid Assets \u00f7\u00a0 (Net Demand &amp; Time Liabilities)] \u00d7 100<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"5_What_is_the_impact_of_SLR_on_the_economy\"><\/span><b>5. What is the impact of SLR on the economy?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Higher SLR means banks have to maintain more liquidity and can lend less. This reduces lending activities and can also help curb inflation as the credit flow is lower.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A lower SLR rate means banks can use money of their reserves to lend money. This increases credit flow in the economy and can be a good stimulus for growth during periods of low economic activity.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"6_When_did_RBI_set_SLR_to_18\"><\/span><strong>6. When did RBI set SLR to 18%?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">As per the Reserve Bank of India policy announced in December 2018, the statutory liquidity ratio (SLR) was reduced by 0.25% each quarter starting January 2019. After six quarterly cuts, the SLR reached 18% in April 2020.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"7_What_is_Statutory_Liquidity_Ratio_in_2026\"><\/span><strong>7. What is Statutory Liquidity Ratio in 2026?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">As of February 19, 2026, the Statutory Liquidity Rate is 18% (as per the official RBI website). For those unaware, it means banks are required to keep at least 18% their net demand and time liabilities (NDTL) in liquid assets like cash or government securities.\u00a0<\/span><\/p>\n<p><b>Disclaimer:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This information is for general information purposes only. GoldenPi makes no guarantee on the accuracy of the data provided here; the information displayed is subject to change and is provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. Investments in the securities market are subject to market risks. Read all the offer-related documents carefully before investing.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fixed Deposit schemes are regulated by the Reserve Bank of India. GoldenPi Securities Private Limited is a registered debt broker and acts as a distributor and not as a manufacturer of the product.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>Latest Updated: 23-02-2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The RBI uses various monetary policy tools to regulate liquidity, control credit flow and maintain stability in the banking system. The Statutory&hellip;<\/p>\n","protected":false},"author":8,"featured_media":11294,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[22],"tags":[35,46],"class_list":["post-11272","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-essentials","tag-nri-investors","tag-primary-market"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Statutory Liquidity Ratio: Meaning &amp; Significance<\/title>\n<meta name=\"description\" content=\"Understand the meaning of Statutory Liquidity Ratio. 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