Consider the following statements with reference to Statutory Liquid Ratio (SLR) and Cash reserve Ratio (CRR).
1. SLR is used to control the bank’s leverage for credit expansion whereas CRR helps in controlling the liquidity in the banking system.
2. Banks don’t earn returns on money kept as SLR with RBI whereas it earns interest on money kept as CLR with the RBI.
Which of the statements given above is/are correct?
1
1 only
2
2 only
3
Both 1 and 2
4
Neither 1 nor 2