Difference in SLR or CRR?

Question

Accepted Answer

SLR and CRR are two monetary policy tools used by the central bank to regulate the economy.

SLR stands for Statutory Liquidity Ratio and CRR stands for Cash Reserve Ratio.
SLR is the percentage of deposits that banks are required to maintain in the form of liquid assets such as cash, gold, or government securities.
CRR is the percentage of deposits that banks are required to keep with the central bank in the form of reserves.
SLR is used to control the flow of credit in the economy while CRR is used to control the money supply.
SLR is currently set at 18% while CRR is set at 4%.
SLR is a more flexible tool as it can be changed by the central bank to regulate credit flow while CRR is a more rigid tool as it requires banks to maintain a fixed percentage of reserves.
Both SLR and CRR are used to maintain financial stability and prevent inflation.

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