Factorial Analysis on Liquidity Management of Commercial Banks in India
Banking industry is distinguished as one of the quickest developing area which has an enormous commitment to the economy of India. The development and advancement of public economy relies on the monetary adequacy of its banks. Thus, efforts should be made often to decide the monetary adequacy of the banks and viable monetary policy should be outlined to deal with its present moment to have long term impact on liquidity scenario. This study is an attempt to analyze the factors that effect the liquidity management of commercial banks, private sector (22) & public sector(12). The outcomes demonstrated that among the bank-specific variables; bank size, capital adequacy proportion, stores proportion, activity productivity proportion, and return on resources proportion are found to emphatically affect liquidity (LQD), while resources quality proportion, resources the executives proportion, return on value proportion, and net revenue edge proportion are found to contrarily affect LQD.
Concerning macroeconomic variables, the outcomes showed that loan cost and swapping scale are found to significantly affect LQD. The RBI (Reserve Bank of India) should give benchmarks for the previously mentioned proportions to accomplish smooth LQD of commercial banks in India. The review suggested that financiers ought to consider resources quality. The review gives some useful tips to financiers, auditors, regulators, financial experts and investors.