What is CRR and SLR in banking?

CRR, or Cash Reserve Ratio, is the percentage of a commercial bank’s total deposits that must be kept with the central bank in the form of cash. It helps control liquidity in the economy and ensures banks maintain sufficient reserves for stability. SLR, or Statutory Liquidity Ratio, is the minimum percentage of a commercial bank’s net demand and time liabilities that must be maintained in approved securities such as government bonds, gold, or cash before offering credit to customers. While CRR is maintained only in cash form with the central bank, SLR can be held in multiple forms. Both tools are used by the central bank to regulate credit flow, maintain monetary stability, and control inflation.