Difficulty: Easy
Correct Answer: 25%
Explanation:
Introduction / Context:
The Statutory Liquidity Ratio, commonly abbreviated as SLR, is the percentage of a bank's net demand and time liabilities that must be maintained in the form of liquid assets such as cash, gold, or approved government securities. The Reserve Bank of India sets and revises this ratio from time to time as part of its monetary and banking regulation policy. This question refers to a historically important exam oriented value of SLR and asks you to identify that value from the options given.
Given Data / Assumptions:
Concept / Approach:
Historically, SLR in India used to be much higher, at one point even reaching above thirty percent, but many standard general awareness questions refer to an SLR figure of 25 percent from a particular period. Among the options given, 25 percent is the value commonly tested in banking and general knowledge exams for that era. The other percentages either do not match widely cited historical values or represent different regulatory ratios, so the approach is to match the most frequently quoted historical SLR value to the choices provided.
Step-by-Step Solution:
Step 1: Recall that SLR was once set at relatively high levels to ensure that banks held substantial liquid assets.
Step 2: Remember that many exam compilations refer to an SLR of 25 percent as the then applicable ratio in earlier years.
Step 3: Compare this remembered value with the options: 7 percent, 12 percent, 25 percent, and 33 percent.
Step 4: Recognise that 7 percent and 12 percent are more characteristic of policy rates or other ratios, not the older SLR value highlighted in these questions.
Step 5: Choose 25 percent as the correct answer while noting that 33 percent, though historically relevant at some point, is not the specific value that this particular question set usually targets.
Verification / Alternative check:
One alternative check is to look at memory based questions from older banking exams, where aspirants frequently recall that the SLR during that period was 25 percent. Though SLR has been revised several times since then, many static general knowledge questions continue to ask about this earlier benchmark. The presence of 25 percent among the options indicates that the question expects this standard exam oriented answer rather than the latest dynamic figure.
Why Other Options Are Wrong:
Seven percent and twelve percent are too low to represent the older SLR that exam questions usually refer to and may cause confusion with other rates such as the cash reserve ratio or policy rates in different years. Thirty three percent is a historically significant figure but would be more appropriate for a question explicitly mentioning that higher level. Since this specific question does not, the correct match is the more commonly cited figure of 25 percent.
Common Pitfalls:
A common pitfall is to think of the current or most recent SLR value and try to match it to the options, forgetting that the question often reflects an older static data point. Another issue is mixing up SLR with the cash reserve ratio or repo rate. To avoid these mistakes, it is helpful to keep separate notes for historical static values and for current dynamic values and pay attention to the wording of the question and the answer choices.
Final Answer:
The Statutory Liquidity Ratio value referred to in this exam oriented question is 25%.
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