Statutory Liquidity Ratio:

Statutory Liquidity Ratio (SLR) It is the amount which a bank has to maintain in the form of cash,  gold or approved securities. The quantum is specified as some percentage of the total demand and time liabilities of a bank. This percentage is fixed by the Reserve Bank of India. The SLR has been used as an instrument of monetary policy to influence the country's macroeconomy. This tool helped in providing the credit to the public sector companies from the banking system in India. Presently this rate is around 24 percent This ratio was very high at 38.5 percent in the early nineties.  

Both high CRR and high SLR meant that the banks could only lend out less than half of their funds to private sector. This is argued to have had an adverse impact on the profitability of the Indian banking sector. These ratios have been brought down significantly in the nineties giving the commercial banks more functional flexibility.