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What is Meant by Statutory Liquidity Ratio (SLR)? Or, Define Statutory Liquidity Ratio (SLR)?
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Statutory  Liquidity Ratio required to the commercial bank to maintain a specified percentage of their deposits in the form of liquid assets. When SLR is raised (as during inflation), credit creation capacity of the commercial bank is curtailed.

 On the other hand, when SLR is lowered (as during deflation), credit creation capacity of the commercial banks is enhanced.

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