CRR stands for cash reserve ratio, and SLR stands for statutory liquidity ratio. In CRR, some percentage of the total bank deposits must be kept in the current account with the RBI. The banks do not have permission to use that money for any commercial activity. Banks can’t use that money for investment purposes. Here, the banks don’t earn any interest on money.

In SLR, some percentage of the total bank deposits is invested in specific securities mainly the central government and the state government securities. Here the bank earns a certain amount of interest on their investment.

This is a very critical question in banking interview questions.

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