Recent Changes in the Theory and Policy of Cash Reserves Ratio and Statutory Liquidity Ratio: A Critical Appraisal

Abstract

As a part of financial sector reforms, the Reserve Bank of India is committed to a reduction in the Cash Reserves Ratio (CRR) and the Statutory Liquidity Ratio (SLR).

This paper by L M Bhole examines this issue critically and argues that the present economic conditions as well as the future economic scenario in India do not warrant a reduction in the CRR and the SLR.