When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likel...

Question

When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?

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Answer

Foreign Institutional Investors may bring more capital into our country

Answer

India’s GDP growth rate increases drastically

Answer

Scheduled Commercial Banks may cut their lending rates

Answer

It may drastically reduce the liquidity to the banking system.