Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the central Bank. If the central bank decides to increase the CRR, the available amount with the banks comes down. Central bank uses the CRR to drain out excessive money from the system. Currently, commercial banks are required to maintain with the Bangladesh Bank an average cash balance, the amount of which shall not be less than 6% of the total of the Net Demand and Time Liabilities (NDTL) of them.
On the other hand, Statutory Liquidity Requirement (SLR) is the amount of liquid assets, such as cash, precious metals or other approved short-term securities, that a
commercial bank must maintain in
its reserves. Currently, commercial banks are
required to maintain 19% of the
total of the Net Demand and Time Liabilities (NDTL) in the form of cash, precious metals or other approved securities.