Government to bring out ordinance on SLR

New Delhi, Jan 17 (UNI) The government today said it will soon bring an ordinance to empower Reserve Bank of India (RBI) to reduce Statutory Liquidity Ratio (SLR) to below 25 per cent.

Joint Secretary Finance Ministry Amitabh Verma said the ordinance will be sent to the President in the next two days and the ministry is anticipating of getting a Presidential nod by the end of this month.

As RBI will come out with its quarterly monetary and credit review on January 31, the timing of promulgation of the ordinance holds importance.

The existing statutory liquidity ratio demands that the banks have to keep 25 per cent of their total deposits in the form of liquid assets comprising cash, gold and approved securities, mostly government bonds.

The cabinet had already cleared the ordinance to cut the floor limit of SLR. The decision to bring an ordinance to amend Banking Regulation Act, 1949, would provide RBI flexibility in the conduct of monetary policy.

UNI