---
title: "Statutory Liquidity Ratio Definition | Model Diplomat"
description: "The Statutory Liquidity Ratio is the minimum percentage of a bank's liabilities that must be held in liquid assets, crucial for credit extension."
url: "https://modeldiplomat.com/learn/glossary/statutory-liquidity-ratio"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Statutory Liquidity Ratio is the minimum percentage of a bank's net demand and time liabilities that it must maintain in safe liquid assets like cash, gold, and approved securities.
- How does SLR differ from the Cash Reserve Ratio?
- What is the legal authority for SLR and what was the 2007 change?
- On what base is SLR calculated?
- How does SLR affect the money supply?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

The Statutory Liquidity Ratio is the minimum percentage of a bank's net demand and time liabilities that it must maintain in safe liquid assets like cash, gold, and approved securities.

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In December 2019 the Reserve Bank of India completed its phased reduction of the Statutory Liquidity Ratio to 18% of net demand and time liabilities, aligning it with Basel III liquidity coverage requirements.

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