Liquidity Management in Foreign Commercial Banks in Bangladesh

Abstract

This report focuses on the current methods of liquidity management used by foreign commercial banks in Bangladesh. Every foreign commercial banks in Bangladesh that operates efficiently abides by the liquidity ratio regulations. At first, it introduces theories and principles for managing liquidity in foreign commercial banks of Bangladesh. Additionally, it contains the key prerequisites for the mechanism of the liquidity management process. When granting loans, foreign commercial banks need to exercise extreme caution. This report’s main goals are to determine whether foreign commercial banks are adhering to the exact liquidity standards. Using financial ratios and liquidity indicators, secondary sources of data are gathered and assessed. The parameters are used to analyze the liquidity condition. According to the analysis, the banking industry has been maintaining more liquidity since 2014 than is required by law. As for that reason, banks are not under any liquidity pressure. Every bank should have a current contingency financing technique to fulfill the economic necessity in a liquidity crisis condition. In this report, an effort has been taken to assess the proficiency in liquidity management of foreign commercial banks of Bangladesh.