The maintenance and impact of CRR and SLR in treasury: an empirical study on Bangladesh Finance Limited

Abstract

Statutory liquidity reserve (SLR) and Cash reserve requirement (CRR) are monetary tools that have helped reduce inflation for many years by positively impacting bank credit and investment. All scheduled banks are bound to keep a minimum reserve in cash with the central bank which is termed as Cash Reserve requirement (CRR). On the other hand, the reserves of a bank invested in government securities like treasury bills and treasury bonds are termed Statutory liquidity reserve (SLR). CRR and SLR are mostly used during inequality created by major financial setbacks. Banks are supposed to sustain sufficient liquidity at a rational cost. The aim of the study is to determine the impact of CRR and SLR on Treasury. The in-depth analysis determines if the financial ratios suggest an enhanced and efficient operation at Bangladesh Finance Limited. Furthermore, the information assembled for the investigation is auxiliary and taken from the monetary reports of Bangladesh Finance Ltd. The findings show a strong positive correlation between Treasury and CRR. Also, a positive correlation between SLR and Treasury is seen.