SLR Full Form- Statutory Liquidity Ratio

Revealing the acronym for “SLR,” it means Statutory Liquidity Ratio. This financial term is specific to the Indian government’s regulations referring to its reserve requirement called SLR. This regulatory mechanism is of great importance in modifying the nature of the monetary system by specifying the weightage that a financial institution must maintain in liquid assets.

More About SLR

• In the field of finances, SLR acts as a barrier for which banks are obliged to keep some percentage of their deposits in identified liquid assets. Gold, cash, and government securities are the usual sorts of liquid assets. 
• The SLR is enforced within the regulatory framework to strengthen banks' financial stability and promote a healthy economic system.
• To those unacquainted with the sophistication of finance, imagine SLR as a financial cushion. It is a form of insurance that makes certain that banks have funds in reserve to meet unexpected needs and thus provides stability during periods when the economy changes. 
• This reserve requirement not only acts as a precautionary measure but is also another instrument through which central banks can control the liquidity in the financial system.
• In technical terms, SLR is represented as a percentage of the NDTL level. This figure is flexible and changes from time to time depending on adjustments made by the central banking authorities. 
• As such, the SLR will be under constant adjustment by regulators who use it to align liquidity balance with changing economic waters.
• SLR’s full-form Statutory Liquidity Ratio denotes a statute in the financial world. It is an instrument whereby governments maintain the integrity and sustainability of their other banking systems, coordinating financial institutions with frugality discourse and protecting depository interests in monetary policy chores dynamics.