Distinguish between: 4. Cash Reserve Ratio and Statutory Liquidity Ratio

Distinguish between:
4. Cash Reserve Ratio and Statutory Liquidity Ratio

Basis
Cash Reserve Ratio
Statutory Liquidity Ratio
Meaning
It is the minimum amount of funds that a commercial bank has to maintain with the Reserve Bank of India in the form of deposits.
It is the minimum percentage of assets, such as gold, cash or securities, which must be maintained by the commercial banks with the Central Bank.
Affect
It affects the bank's capacity to lend.
It affects the bank's liquidity.

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