Analysis of Liquidity of Nationalised Banks in India

The present study is to analyse the liquidity of the selected nationalised banks in India. The present study is used exploratory-cum-descriptive research design. Sample of the ten nationalised banks i.e., Andra Bank, Bank of Baroda, Bank of India, Canara Bank, Corporation Bank, Dena Bank, Indian Overseas Bank, Indian Bank, Union Bank, United Bank of India has been used and the period of the study is 2004-05 to 2013-14. The study is based on secondary data which has been collected from Indian Banks' Association, Reserve Bank of India, website and CMIE Prowess database. Average and ranking are used as tool and techniques of analysis. The study found that Spread/NII to Total Assets ratio is highest in Indian Bank and lowest in Bank of Baroda; Operating Profits to Average Working Fund ratio is highest in Andra Bank and lowest in United Bank of India; Liquid Assets to Total Assets ratio is highest in Bank of Baroda and lowest in Indian Bank; Government Securities to Total Assets ratio is highest in Canara Bank and lowest in Bank of India; Liquid Assets to Demand Deposits ratio is highest in Bank of Baroda and lowest in Corporation Bank and Liquid Assets to Total Deposits ratio is highest in Bank of Baroda and lowest in Indian Bank. The study suggested that Banks should increase their liquidity in multiple ways, each of which ordinarily has a cost, including: Shorten asset maturities, Improve the average liquidity of assets, Lengthen liability maturities, Issue more equity, Reduce contingent commitments and obtain liquidity protection