Date:10/03/2007 URL: http://www.thehindubusinessline.com/2007/03/10/stories/2007031005660600.htm

Back Bill to replace SLR Ordinance introduced

Our Bureau

New Delhi March 9 The Finance Minister, Mr P Chidambaram, on Friday introduced the Banking Regulation (amendment) Bill 2007 in Lok Sabha.

This Bill seeks to replace the Ordinance that was promulgated on January 23 to enable the Reserve Bank of India (RBI) to specify the statutory liquidity ratio (SLR) without any floor.

It was felt that the RBI, as the regulator and the authority vested with the powers to conduct monetary policy, should have the necessary flexibility regarding stipulation of holding of liquid instruments by banks.

The Ordinance facilitated the removal of the then existing SLR floor of 25 per cent, while leaving the ceiling of 40 per cent in tact.