CASH RESERVE RATIO AND
STATUTORY LIQUIDITY RATIO

1)      Cash Reserve Ratio (CRR):
Cash Reserve Ratio (CRR) is a certain minimum
amount of deposit that the commercial banks have to hold as reserves with the
central bank. CRR is set according to the guidelines of the central bank of a
country.

 How does it affect State Bank of India?

For E.g.: Let us
assume Mr. Vedanth deposits Rs 100 with State Bank of India. If the CRR is 9%,
then the bank will have to hold Rs 9 with the central bank as reserves. This
means that State Bank of India will be able to use only Rs 91 for investments
and/or lending or credit purpose.

During
Inflation: Let us assume there is hyperinflation in
the economy. Now RBI wants to control
inflation. It has to reduce the supply of money. For this, the Central Bank
increases CRR, thereby reducing the amount for investments and the amount for
lending. Thus liquidity is reduced and hence it leads to a fall in inflation

The current rate of CRR
is 4%.

2)      Statutory Liquid Ratio
(SLR): Statutory
Liquid Ratio (CRR) is the minimum amount of money from the deposits they
receive, which has to be invested on the securities of the Central Bank or
State Bank.

Impact on State Bank during Inflation:

Let us assume there is hyperinflation in the economy.
Now RBI wants to control inflation. It has
to reduce the supply of money. For this, the Central Bank increases SLR,
thereby reducing the amount for investments and the amount for lending.

 

The current rate of SLR is 19.5%.

Overall
Impact of CRR and SLR on SBI:

 

 

 

 

 

 

 

 

 

 

DRIVE
TOWARDS DIGITALISED ORGANISATION

With current say scenario, for a differentiated and
delightful customer experience ,SBI is enhancing their digital platform and is
committed towards increasing digital initiatives in their products,services and
transactions

Government’s drive towards demonetisation has given a strong
push to the popularity of digital banking. SBI aims to be the banker to digital
India and has been at the fore-front of all digital initiatives in the banking
space. Post demonetisation,  digital
initiatives have helped millions of Indians to adapt to easier, faster and
safer ways of going cashless. Demonetisation has deeply impacted the volume of
our digital transactions, recording significant growth since November 2016.

Digitisation has helped to take control of the
customer-experience ecosystem by managing the business processes from the
customers’ perspective. With the increasing use of technology enabled devices,
and in order to catch up with the increasing expectations of the world, the
extensive digitisation of our backend processes is inevitable.

 With this digital
strCASH RESERVE RATIO AND
STATUTORY LIQUIDITY RATIO

1)      Cash Reserve Ratio (CRR):
Cash Reserve Ratio (CRR) is a certain minimum
amount of deposit that the commercial banks have to hold as reserves with the
central bank. CRR is set according to the guidelines of the central bank of a
country.

 How does it affect State Bank of India?

For E.g.: Let us
assume Mr. Vedanth deposits Rs 100 with State Bank of India. If the CRR is 9%,
then the bank will have to hold Rs 9 with the central bank as reserves. This
means that State Bank of India will be able to use only Rs 91 for investments
and/or lending or credit purpose.

During
Inflation: Let us assume there is hyperinflation in
the economy. Now RBI wants to control
inflation. It has to reduce the supply of money. For this, the Central Bank
increases CRR, thereby reducing the amount for investments and the amount for
lending. Thus liquidity is reduced and hence it leads to a fall in inflation

The current rate of CRR
is 4%.

2)      Statutory Liquid Ratio
(SLR): Statutory
Liquid Ratio (CRR) is the minimum amount of money from the deposits they
receive, which has to be invested on the securities of the Central Bank or
State Bank.

Impact on State Bank during Inflation:

Let us assume there is hyperinflation in the economy.
Now RBI wants to control inflation. It has
to reduce the supply of money. For this, the Central Bank increases SLR,
thereby reducing the amount for investments and the amount for lending.

 

The current rate of SLR is 19.5%.

Overall
Impact of CRR and SLR on SBI:

 

 

 

 

 

 

 

 

 

 

DRIVE
TOWARDS DIGITALISED ORGANISATION

With current say scenario, for a differentiated and
delightful customer experience ,SBI is enhancing their digital platform and is
committed towards increasing digital initiatives in their products,services and
transactions

Government’s drive towards demonetisation has given a strong
push to the popularity of digital banking. SBI aims to be the banker to digital
India and has been at the fore-front of all digital initiatives in the banking
space. Post demonetisation,  digital
initiatives have helped millions of Indians to adapt to easier, faster and
safer ways of going cashless. Demonetisation has deeply impacted the volume of
our digital transactions, recording significant growth since November 2016.

Digitisation has helped to take control of the
customer-experience ecosystem by managing the business processes from the
customers’ perspective. With the increasing use of technology enabled devices,
and in order to catch up with the increasing expectations of the world, the
extensive digitisation of our backend processes is inevitable.

 With this digital
structural change, we are redesigning our business development model. By
strategically connecting businesses with the vast amount of data that is
available to us, we plan to build clear and predictive insights into our
customers’ evolving needs.

 

Digital tools and technology can completely transform the distribution
reach of SBIs banking services and the banking cycle time in general. The
benefits are immense: By digitising information-intensive processes, costs can
be reduced significantly and turnaround times are improved remarkably. These
efforts are expected to positively impact the efficiency and productivity of
our Bank, and are essential for being an enduring value creator.uctural change, we are redesigning our business development model. By
strategically connecting businesses with the vast amount of data that is
available to us, we plan to build clear and predictive insights into our
customers’ evolving needs.

 

Digital tools and technology can completely transform the distribution
reach of SBIs banking services and the banking cycle time in general. The
benefits are immense: By digitising information-intensive processes, costs can
be reduced significantly and turnaround times are improved remarkably. These
efforts are expected to positively impact the efficiency and productivity of
our Bank, and are essential for being an enduring value creator.