Inflation rises; RBI reduces SLR to 24 pc

Mumbai, Dec 16: Following the rising demand and high global commodity rates, Reserve Bank of India (RBI) announced diminution in the Statutory Liquidity Ratio (SLR) of scheduled commercial banks (SCBs) from 25 percent to 24 percent, which would come in effect from Dec 18, 2010.

However, the central bank did not change its key interest rates and RBI on Dec 16 also announced to retain its repo rate and reverse repo rate at 6.25 percent, 5.25 percent respectively.

The ratio of liquid assets to demand and time liabilities is known as Statutory Liquidity Ratio (SLR). An increase in SLR also restrict the bank's leverage position to gain more money into the economy.

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