SLR investments:

As part of prudential guidelines, central banks require lenders to maintain a portion of their deposits in liquid assets.
These liquid assets can be cash, gold or government securities. The ratio of prescribed liquid investments to deposits
is termed as statutory liquidity ratio. In India, banks invest in bonds issued by the government and notified by the
Reserve Bank of India as qualifying for SLR to meet the prescribed ratio. Currently, the prescribed statutory liquidity
ratio for banks is 21.5% of their deposits.
Statutory Liquidity Ratio (SLR): Amount of liquid assets such as precious metals(Gold) or other approved
securities, that a financial institution must maintain as reserves other than the cash.
Formula: SLR rate = (liquid assets / (demand + time liabilities)) 100%
Non-SLR investments?
Besides giving loans to businesses and individuals, RBI has also allowed banks to invest in various capital market
instruments such as stocks and bonds issued by public and private sector companies and commercial papers. In
addition, banks are also allowed to invest in various mutual fund schemes. Unlike SLR investments, there is no
compulsion on banks to invest in these instruments. Investments are entirely guided by commercial considerations
and many such investments are in accordance with the prescribed guidelines.