SLR is defined as :

Percentage of deposits which a bank must keep as cash reserves Keeping some reserves in liquid form in the short term in bank Reserve of cash reserve ratio in the short term Buying or selling of bonds in the short term

Keeping some reserves in liquid form in the short term in bank

The correct answer is option (2) : Keeping some reserves in liquid form in the short term in bank Apart from the CRR, banks are also required to keep some reserves in liquid form in the short term. This ratio is called Statutory Liquidity Ratio or SLR.