ANALYSIS OF LIQUIDITY OF SELECTED NATIONALISED BANKS IN INDIA

Abstract

 

One of the most critical tasks for bank management is to measure and satisfy a bank's liquidity demands. Long-term profitability may suffer if a bank holds a substantial proportion of its money in low-earning liquidity sources in comparison to its demands for such liquidity. The current study is an analytical examination of the financial performance of chosen nationalised banks in India in terms of liquidity. For analytical purposes, several ratios including the F-Test were utilised, and it was discovered that some banks with more liquidity had poorer productivity and profitability. This demonstrates the need of good liquidity management in order to improve productivity and profitability, as excessive liquidity has a negative impact on the bank's performance.