SLR stands for Statutory Liquidity Ratio, which is a minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold, or other securities. It is a reserve requirement that banks are expected to keep before offering credit to customers. The SLR is fixed by the Reserve Bank of India (RBI) and is a form of control over the credit growth in India. The SLR is one of the traditional tools of the central banks monetary policy to control credit growth, flow of liquidity, and inflation in the economy. Banks are not allowed to lend below the minimum interest rate set by the RBI, which is determined by the SLR. The SLR is evaluated as the percentage value of the bank’s liquid assets divided by an aggregate of its net demand and time liabilities. If a bank fails to maintain the prescribed SLR, it is liable to pay a penalty to the RBI. The SLR is different from the Supplementary Leverage Ratio (SLR), which is the US implementation of the Basel III Tier 1 leverage ratio.