Correct Option (d):
The Statutory Liquidity Ratio (SLR) mandates commercial banks to maintain a specified percentage of their Net Demand and Time Liabilities (NDTL) in liquid assets. These assets primarily include government securities, cash, and gold. By requiring banks to invest in government securities like bonds and treasury bills, SLR serves as a mechanism through which commercial banks provide credit to the government. This ensures a stable source of funding for government expenditure and borrowing requirements.
Incorrect Options:
(a) Cash Credit Ratio: This term is not a recognized monetary policy instrument or a standard banking ratio used in India to indicate credit provision to the government.
(b) Debt Service Obligation: This refers to the amount of money required to cover the repayment of principal and interest on a debt. It is a borrower's liability, not a mechanism for banks to provide credit to the government.
(c) Liquidity Adjustment Facility (LAF): LAF is a monetary policy tool used by the Reserve Bank of India (RBI) to manage short-term liquidity in the banking system. It involves repo and reverse repo operations between the RBI and commercial banks, primarily for managing liquidity and interest rates, not for providing direct credit to the government.