| Author | Hossain, Mohammad Mokter |
| Note | A project study submitted in partial fulfillment of the requirements for the
degree of Professional Master in Banking and Finance, School of Management |
| Publisher | Asian Institute of Technology |
| Abstract | In this paper the commercial banking sectors of Bangladesh has been emphasized. In commercial banking sector, liquidity is the symbol of trust to the customers and on the other hand profit is the main objective. So, reserving more liquidity hampers the profitability and less liquidity hampers the trust of the customers. The primary function of commercial bank is to receive deposit and to lend money. Simultaneously, its primary responsibility is to maintain adequate liquidity. If it is not ensured adequately, it may face obvious difficulties. On the other hand, maintaining excess liquidity may reduce earnings. So, liquidity management is like a Knife-edge management problem. That’s why one of the most important tasks faced by the management of any bank is ensuring adequate liquidity. In this regard the liquidity and profitability of banking sector of Bangladesh has been studied on a comparison basis emphasizing on State Owned Commercial Banks (SCBs), Domestic Commercial Banks (PCBs) and Foreign Commercial Banks (FCBs). The fact has been revealed in the study is that overall banking industry of Bangladesh is maintaining the adequate and excess liquidity in the period of 2002 to 2010 and FCBs are more liquid than the SCBs and PCBs. Simultaneously FCBs are also more profitable than the others. Reasons behind the excess liquidity, different profitability of the various types of banks have been discussed. How excess liquidity is hampering the profitability, the inherent reasons behind this has been also described in the study. |
| Year | 2012 |
| Type | Project |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Chairperson(s) | Venkatesh, Sundar |
| Examination Committee(s) | Winai Wongsurawat;Freiburghaus, Markus |
| Scholarship Donor(s) | Central Bank of Bangladesh |