Module: | Priority Sector, Consumer Protection & Digital Lending
Q67: Under Section 24 of the Banking Regulation Act, 1949, banks must maintain SLR in specific forms. Which of the following is NOT a valid form for maintaining SLR?
✅ Correct Answer: C
The correct answer is C. Corporate Bonds, irrespective of their high credit rating (such as AAA), are not considered "Approved Securities" under Section 24 of the Banking Regulation Act, 1949.
SLR portfolios are designed to be an absolute safe haven (solvency buffer) free from commercial credit risk.
Corporate debt inherently carries default risk and therefore cannot be used for SLR compliance.
Option A is valid, as excess cash balances maintained with the RBI or in bank vaults count toward SLR.
Option B is valid, as physical gold is a universally accepted liquid asset.
Option D is perfectly valid, as dated government securities (G-Secs) carry a sovereign guarantee and form the primary bulk of any bank's SLR portfolio.
SLR portfolios are designed to be an absolute safe haven (solvency buffer) free from commercial credit risk.
Corporate debt inherently carries default risk and therefore cannot be used for SLR compliance.
Option A is valid, as excess cash balances maintained with the RBI or in bank vaults count toward SLR.
Option B is valid, as physical gold is a universally accepted liquid asset.
Option D is perfectly valid, as dated government securities (G-Secs) carry a sovereign guarantee and form the primary bulk of any bank's SLR portfolio.