Journal of Economics and Business
ISSN 2615-3726 (Online)
ISSN 2621-5667 (Print)
Published: 25 February 2020
An Empirical Analysis on Liquidity Management of Commercial Banks in Bangladesh: A Comparative Study Between State-Owned and Private Commercial Banks
Raad Mozib Lalon, Nadia Naher
University of Dhaka, Bangladesh
Download Full-Text Pdf
Keywords: D/E ratio, I/A ratio, ROA, SCBs, PCBs
This study attempts to analyze and compare the liquidity position of major ten private commercial banks and major five state own commercial banks in Bangladesh. In Bangladesh where the conventional banks require maintaining 18% of their deposits as Statutory Liquidity Requirement (SLR) there will be an impact on liquidity of such a ratio. As we know, the number of state-owned banks in Bangladesh is 6 where as the number for private commercial banks is 40 with more new banks to join the numbers. For this research, a random sample of 10 banks from Private commercial banks and 5 state-own banks are taken, the individual liquidity risk ratio, D/E ratio, I/A ratio, bank size, liquidity asset and ROE is tracked. The variables as a whole in F-test are found to be significant with a 5% AND 10% significance level. Individually all the variables in both sectors of banking are found to be significant except for Liquidity risk in state-owned banking.
- Auty, R. M (2001) The political economy of resource-driven growth; European Economic Review, vol 45, 839–846.
- Akhtar, M. F., Ali, K., & Sadaqat, S. (2011). "Liquidity Risk Management: A comparative study between Conventional and Islamic Banks of Pakistan". Interdisciplinary Journal of Research in Business, 1(1),
- Ahmed, N., Akhtar, M. F., & Usman, M. (2011). “Risk Management Practices and Islamic Banks: An Empirical Investigation from Pakistan”. Interdisciplinary Journal of Research in Business, 1
- Allen, L. & Rai, A., 1996. Operational efficiency in banking: an international comparison. Journal of Banking and Finance, Volume 20 No. 4
- Ayub, M. (2007) Understanding Islamic Finance. John Wiley & Sons.
- Ben, N. S. & Goaied, M., 2001. The determinants of the Tunisian deposit banks'performance. Applied Financial Economics, Volume 11 No.2
- Business Journals from
- Bangladesh Bank website:
- Daily Star website:
- Faghih. M (2004) Credit Risk Management and its policies (applied approach), journal of bank and economy, No. 46.
- Ismal, R. (2010). "Strengthening and improving the liquidity management in Islamic banking". Humanomics,
- investopedia website:
- Leilidoust. M (2008) Measuring liquidity risk and its relation with profitability in Mellat bank”, Master Thesis, Tehran, Higher Institute of Banking.
- WORKING CAPITAL MANAGEMENT AND PROFITABILITY: A STUDY ON CEMENT INDUSTRY IN BANGLADESH, Md. Ariful Hoque, Md. Amin Mia and S.M. Rakibul Anwar
- wikipedia website: