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Abstract
In the Indian Financial system, maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) by Banks are important tools to ensure that the regulator RBI is able to control the supply of money in the system. RBI uses CRR either to drain excess liquidity or to release funds needed for the growth of the economy from time to time. RBI can increase the SLR to contain inflation, suck liquidity in the market or to tighten the measure to safeguard the customer's money. In this paper, CRR and SLR management at The Jammu and Kashmir Bank Ltd. (J&K Bank) was studied. Maintaining CRR & SLR is one of the primary functions of a treasury. Apart from this, the banks are also responsible for filing the CRR-SLR returns to the RBI. Therefore as a part of this study, various returns were studied to gain a deeper insight into the CRR-SLR Management process at J&K Bank.
Key Words : Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Treasury, , Demand and Time Liabilities (DTL), Reporting Friday.
INTRODUCTION
The Jammu & Kashmir Bank Ltd. was founded on October 1, 1938 under letters of patent issued by the Maharaja of Jammu and Kashmir, Hari Singh. The Maharaja invited eminent Kashmiri investors to become founding directors and shareholders of the bank. The Bank commenced business on July 4, 1939 and was considered the first of its nature and composition as a state owned bank in the country. The Bank was established as a semi-state bank with participation in capital by state and the public under the control of State Government.
In 1971, Jammu and Kashmir Bank was granted the status of a 'Scheduled Bank'. Today, it has more than 600 branches across the country. Governed by the Companies Act and Banking Regulation Act of India, it is regulated by RBI and SEBI. It is listed on the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE).
J&K Bank follows a two-legged business model whereby it seeks to increase lending in its home state which results in higher margins despite modest volumes, and at the same time, seeks to capture niche lending opportunities on a pan-India basis to build volumes and improve margins.
Cash...