When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?

1. A. India”s GDP growth rate increases drastically
2. B. Foreign Institutional Investors may bring more capital into our country
3. C. Scheduled Commercial Banks may cut their lending rates
4. D. It may drastically reduce the liquidity to the banking system

Answer: C

Explanation

The SLR cut by the RBI is likely to give more elbow room for banks to cut rates.