The inputs of commercial banks are deposits from customers. These are the sources of funds (liabilities), which are payable with or without profit on demand or at a specified date. Hence are called the demand and time liabilities of the bank. Out of these total demand and time liabilities, specific percentage amounts are kept towards maintenance of CRR(currently 5%) and SLR(currently 15%) requirements. The CRR is the cash reserve maintained with Central Bank at 0% rate of profit on daily basis. Similarly SLR is the liquid assets to be maintained in the form of liquid cash and government securities namely Federal Investment Bonds, Pakistan Investment Bonds and Market Treasury Bills. The rest of the funds i.e. remaining 80% may be used for lending and other investment purpose.
