Statutory liquidity ratio (SLR)
SLR = Statutory Liquidity Ratio- How often
- At policy meetingsChanged by the RBI by notification
- Next release
- Fri 4 DecIn 22 days · 10:00 AM
Cut by 25 bp, effective 11 April 2020.
Events on this chart
Source: RBI, released 5 Dec 2018 · Chart: Clarity UPSC
- Previous
- 18.25%4 Jan 2020
- Highest
- 25.00%7 Nov 2009
- Lowest
- 18.00%11 Apr 2020
18 readings since 7 Nov 2009.
Story
The share of deposits a bank must hold in safe, liquid assets, mostly government bonds.
What is happening now As of 11 Apr 2020
The Statutory Liquidity Ratio (SLR) has been 18% of Net Demand and Time Liabilities (NDTL) since 11 April 2020. That was the last of six quarterly cuts of 0.25 percentage point, announced on 5 December 2018, which took the ratio down from 19.5%.
The Reserve Bank of India (RBI) made the cuts to align the SLR with the Liquidity Coverage Ratio (LCR). The LCR, which scheduled commercial banks had to bring to at least 100% by 1 January 2019, also makes banks hold high-quality liquid assets such as government securities. The SLR has not changed since 2020: the RBI's policy decisions of 7 October 2026 made no change to it, and its website lists it at 18% on 12 November 2026.
Why it matters
The Statutory Liquidity Ratio (SLR) makes every bank keep a cushion of safe assets that it can sell or borrow against when depositors want their money. Most of this cushion is government bonds, so the SLR also gives the Union and State governments a large, steady demand for their borrowing.
The ratio also affects lending. A higher SLR ties up more of each deposit in bonds and leaves less for loans to farms, firms and households; a lower SLR frees money for lending.
What it is
Banks must hold part of their net demand and time liabilities, which are mostly deposits, in liquid assets they keep themselves: cash, gold or approved securities, mostly government bonds. The required share is the Statutory Liquidity Ratio (SLR).
The SLR keeps banks able to meet withdrawals. It also creates steady demand for government bonds.
The Reserve Bank of India sets it under Section 24 of the Banking Regulation Act, 1949, up to a ceiling of 40%.
Read this number
- The publisher
- The Reserve Bank of India is India's central bank. It manages money supply, bank regulation, the rupee and the country's foreign exchange reserves.
- Held by
- The bank itself
- Assets
- Cash, gold, approved securities
- Law
- Banking Regulation Act, 1949, Section 24
- Ceiling
- 40% of NDTL
- Release rule
- Changed by the RBI by notification; rarely moves
Terms on this page (4)
- CRR
- Cash Reserve Ratio
- LCR
- Liquidity Coverage Ratio
- NDTL
- Net Demand and Time Liabilities
- RBI
- Reserve Bank of India
History
- 2007An amendment to the Banking Regulation Act removes the 25% floor. The Reserve Bank of India (RBI) can now set the Statutory Liquidity Ratio (SLR) anywhere up to 40%.
- 2008–09Cut to 24% in November 2008, then raised to 25% in November 2009.
- 2010–2017Cut in steps from 25% to 19.5% by October 2017.
- 5 Dec 2018The RBI announces cuts of 0.25 percentage point every quarter, from 19.5% to 18%.
- 11 Apr 2020The last quarterly step takes the SLR to 18%.
Readings
| Period | Value | Status | Released |
|---|---|---|---|
| 11 Apr 2020 | 18.00% | Final | 5 Dec 2018 |
| 4 Jan 2020 | 18.25% | Final | 5 Dec 2018 |
| 12 Oct 2019 | 18.50% | Final | 5 Dec 2018 |
| 6 Jul 2019 | 18.75% | Final | 5 Dec 2018 |
| 13 Apr 2019 | 19.00% | Final | 5 Dec 2018 |
| 5 Jan 2019 | 19.25% | Final | 5 Dec 2018 |
| 14 Oct 2017 | 19.50% | Final | 4 Oct 2017 |
| 24 Jun 2017 | 20.00% | Final | 7 Jun 2017 |
| 7 Jan 2017 | 20.50% | Final | 10 Dec 2015 |
| 1 Oct 2016 | 20.75% | Final | 10 Dec 2015 |
| 9 Jul 2016 | 21.00% | Final | 10 Dec 2015 |
| 2 Apr 2016 | 21.25% | Final | 10 Dec 2015 |
For UPSC
Learn the Statutory Liquidity Ratio (SLR) together with the Cash Reserve Ratio (CRR): SLR securities earn interest and stay with the bank; CRR cash sits with the Reserve Bank of India and earns nothing.