CAIIB · CB · Chapter 2

Functions of Central Banks

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Central Banking (Elective) — CAIIB.

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Statute — CRR / SLR?

CRR: Sec. 42(1) RBI Act, 1934; SLR: Sec. 24 BR Act, 1949

Maintained with — CRR / SLR?

CRR: RBI (in cash); SLR: Bank itself (cash, gold, approved securities)

Earns interest? — CRR / SLR?

CRR: No (since 31 Mar 2007); SLR: Yes (on G-Sec component)

Current rate (Jun 2026) — CRR / SLR?

CRR: 3.00% of NDTL; SLR: 18.00% of NDTL

Minimum / Maximum — CRR / SLR?

CRR: No floor/ceiling currently; SLR: No floor; ceiling 40% of NDTL

Repo Rate?

RBI lends to banks against G-Secs. Repo = 5.25% (Jun 2026).

Reverse Repo?

RBI absorbs liquidity. Now largely subsumed by SDF; 3.35%.

Standing Deposit Facility (SDF)?

uncollateralised liquidity absorption window, introduced 8 April 2022, replacing fixed-rate reverse repo as the floor of LAF corridor. SDF = 5.00%.

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