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UPSC 2015: When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?
(a)India’s GDP growth rate increases drastically
(b)Foreign Institutional Investors may bring more capital into our country
(c)Scheduled Commercial Banks may cut their lending rates
(d)It may drastically reduce the liquidity to the banking system
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Not attemptedCorrect Answer: (c) Scheduled Commercial Banks may cut their lending rates
Lowering the SLR means banks must hold a smaller proportion of deposits in liquid government securities/cash, freeing funds for lending. Greater loanable funds usually lead banks to reduce their lending (interest) rates; it does not reduce liquidity, nor does it directly spur FIIs or a drastic GDP jump. ([edukemy.com](https://edukemy.com/blog/upsc-prelims-2015-question-22/?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2015 Indian Economy question?▼
The correct answer is option (c): Scheduled Commercial Banks may cut their lending rates. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Monetary Policy & Money Supply question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2015, GS Paper 1, as Question 22. It falls under Indian Economy > Monetary Policy & Money Supply.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from Monetary Policy & Money Supply?▼
UPSC has asked 27 questions from Monetary Policy & Money Supply (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.