Module: General Practice
Q15: Consider the following statements regarding CRR and SLR maintenance by banks:
Statement 1: The Statutory Liquidity Ratio (SLR) is mandated under Section 24 of the Banking Regulation Act, 1949, requiring banks to hold a portion of their deposits in safe, highly liquid assets.
Statement 2: The RBI's 2026 Amendment Directions revise the computational framework for Net Demand and Time Liabilities (NDTL), specifically adjusting the treatment of inter-bank borrowings.
Statement 3: The penalty for a shortfall in maintaining the daily CRR balance is set at the Bank Rate plus 3% for the first day of default.
Statement 4: The amendment specifies that banks must maintain at least 90% of the required CRR balance on every single day of the reporting fortnight.
Which of the above statements is/are correct?
Statement 2: The RBI's 2026 Amendment Directions revise the computational framework for Net Demand and Time Liabilities (NDTL), specifically adjusting the treatment of inter-bank borrowings.
Statement 3: The penalty for a shortfall in maintaining the daily CRR balance is set at the Bank Rate plus 3% for the first day of default.
Statement 4: The amendment specifies that banks must maintain at least 90% of the required CRR balance on every single day of the reporting fortnight.
Which of the above statements is/are correct?
✅ Correct Answer: D
🎯 Quick Answer:
All statements are correct. (Option D)They dictate what percentage of a bank's total deposits (NDTL) cannot be lent out to the public, ensuring the bank always has emergency liquidity.
Structural Breakdown: CRR is kept as raw cash with the RBI (earning zero interest). SLR is kept in the bank's own vaults in the form of gold, cash, or approved government securities (earning some interest). Historical / Static Context: The RBI acts as the lender of last resort.
By imposing severe penalties (linked to the Bank Rate) for CRR defaults, it forces banks to maintain strict daily discipline rather than just balancing their books at the end of the month.
The Dynamic Update (NEW) & Data: The February 2026 amendment qualitatively alters how inter-bank borrowings are calculated within NDTL (Statement 2). The hard data tests fundamental compliance metrics: banks face a massive penalty of Bank Rate + 3% on the very first day of a CRR shortfall (Statement 3), and to prevent end-of-fortnight window dressing, they must maintain a minimum of 90% of their required CRR balance on every single day (Statement 4).