1. There is no minimum limit for SLR. (Earlier there used to be 25% limit but after amendment there is no minimum limit). Maximum limit for SLR is 40%.
2. There is no minimum or maximum limit for CRR. RBI can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate. Earlier it used to be minimum- 3% and maximum 20% as per section 42, RBI Act 1934. After Amending the RBI act in 2007 these limits were removed.
3. In LAF minimum amount to be borrowed in 5 crore. (Banks can't pledge securities from SLR quota). All clients of RBI are eligible to avail LAF. LAF started in 2000.
4. For MSF minimum is 1 crore and can be borrowed upto 1% of NDTL. Here only scheduled commercial banks can borrow, not all clients of RBI. MSF started in 2011.
5. No interest is paid by RBI on these CRR and SLR reserves. Banks have to park the CRR amount with RBI (not physically transferring cash but crediting in the current A/c they have with RBI), Banks keep the SLR reserve with themselves but can't use it.
6. CRR is calculated on average fortnightly basis. Banks have to maintain a daily minimum of 70%. No such limit for SLR.
7. These SLR, CRR, OMO, LAF are quantitative tools of monetary policy.
8. Qualitative tools are Moral suasion, selective credit control, margin requirements etc. (Direct approach)
9. NBFCs have to maintain SLR (15%) but not CRR.
10. If banks fail to comply then penalty is bank rate+ 3% p.a, for further non-maintenance it can go upto bank rate+5% p.a.
2. There is no minimum or maximum limit for CRR. RBI can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate. Earlier it used to be minimum- 3% and maximum 20% as per section 42, RBI Act 1934. After Amending the RBI act in 2007 these limits were removed.
3. In LAF minimum amount to be borrowed in 5 crore. (Banks can't pledge securities from SLR quota). All clients of RBI are eligible to avail LAF. LAF started in 2000.
4. For MSF minimum is 1 crore and can be borrowed upto 1% of NDTL. Here only scheduled commercial banks can borrow, not all clients of RBI. MSF started in 2011.
5. No interest is paid by RBI on these CRR and SLR reserves. Banks have to park the CRR amount with RBI (not physically transferring cash but crediting in the current A/c they have with RBI), Banks keep the SLR reserve with themselves but can't use it.
6. CRR is calculated on average fortnightly basis. Banks have to maintain a daily minimum of 70%. No such limit for SLR.
7. These SLR, CRR, OMO, LAF are quantitative tools of monetary policy.
8. Qualitative tools are Moral suasion, selective credit control, margin requirements etc. (Direct approach)
9. NBFCs have to maintain SLR (15%) but not CRR.
10. If banks fail to comply then penalty is bank rate+ 3% p.a, for further non-maintenance it can go upto bank rate+5% p.a.
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