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

Explanation

If SLR is reduced, banks have to park lesser money with RBI in form of securities, cash etc. So, they have more money to lend and the return on lending is also greater than what they get in SLR. Hence, the scheduled commercial banks may cut their lending rates.Tikdam: SLR reduced, mmore funds with the bank so lending rates reduced. 1st and 4th statement – drastic redflag pause and think – obviously wrong