Banking Exam Question - What is Liquidity Management in Banks? Reason & Importance of Liquidity Management in Banks.

Introduction - Liquidity Management in Banks

In fund, liquidity management takes one of two structures in light of the meaning of liquidity. One sort of liquidity alludes to the capacity to exchange a benefit, for example, a stock or bond, at its present cost. The other meaning of liquidity applies to extensive associations, for example, budgetary foundations. 

The analysis and management of an organisation's working capital and its sources of finance, to ensure that it is able to pay its obligations when they fall due. Liquidity administration is one of the center parts of the treasury and keeping up the correct level of liquidity to prepare for dangers is of key significance. 

Liquidity management will incorporate the examination of monetary proportions regularly utilized as a part of bookkeeping. By breaking down the bookkeeping proportions, entrepreneurs will get profitable bits of knowledge into monetary perspectives including money accessible to spend or contribute, sums due from clients and cash tied up in portable and resolute resources.