IMPORTANCE OF LIQUIDITY IN COMMERCIAL BANKS ADEQUACY

IMPORTANCE OF LIQUIDITY IN COMMERCIAL BANKS ADEQUACY OR INADEQUACY OF WORKING CAPITAL: ITS IMPORTANCE AND IMPLICATION

TABLE OF CONTENTS

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

1.2 STATEMENT OF PROBLEM

1.3 OBJECTIVE OF STUDY

1.4 SCOPE OF THE STUDY

1.5 LIMITATION OF STUDY

1.6 DEFINITION OF TERMS

CHAPTER TWO

2.0 REVIEW OF RELATED LITERATURE

2.1 OPERATIONAL CONCEPTS

2.2 MEASUREMENT OF BAN LIQUIDITY

2.3 PROBLEMS IN COMMERCIAL BANKS

CHAPTER THREE

3.1 SUMMARY OF FINDINGS

3.2 CONCLUSION

3.3 RECOMMENDATION

3.3 BIBLIOGRAPHY

REFERENCE

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Liquidity is the word that bankers use to describe the ability to satisfy demand for cash in exchange for deposit. A bank is considered to be liquid when it has in various forms and locations plus arrestment insecurities that are easily available at a short notice without loss or much loss to the bank, it could be conventional to refers to a bank as being liquid when it has enough liquidity to meet any financial emergency, for instance, during a runoff, the bank have the question of how much liquidity to hold and in what form is of great concern to any prudent bank manager.

Manager are also face with the requirements to comply with liquidity to meet seasonal and unexpected run on bank for cash be anticipated and met in advance from expected each in flow, deposit loan repayment or earnings.

In light of the above, the role of liquidity in our commercial banks becomes all to real its importance cannot therefore be over emphasized liquidity is needed to take advantage of unexpected favourable and profitable opportunity or for aggressive purpose.

If a bank is needed of liquidity, it becomes difficult for it to take opportunities like this. A bank might run into difficulties when a firm that they went to secure as a customer family presents a loan application or particular desirable investment development, it becomes difficult for them to do this, it is not sufficiently liquid. Usually the bank approach is to identity two liquidity needs of banks, one is the need for immediate liquidity to ensure to continual day-to-day operations (e.g. liquidity to meet with drawal of deposits by customers, clients) and the other it the need to meet unforeseeable problems in financing the banks know future commitments the balance sheet relationship which is most relevant to this view of liquidity is that of deposit liability.

DOWNLOAD COMPLETE PROJECT MATERIAL