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Determinants of liquidity in nationalised banks of India

Conference Paper


Abstract


  • The purpose of this paper is to identify the determinants of liquidity among government owned

    nationalised banks in India. Nationalised banks in India are the biggest group of banks and any

    issue with nationalised banks can have the potential of affecting liquidity of entire banking system

    in India. The data covers a period from 1996 to 2012. Results of OLS regression show that the

    most significant factors influencing liquidity in nationalised banks of India are: call rate, cash

    reserve ratio and statutory liquidity ratio, gross domestic products, among the macroeconomic

    factors and capital to total assets and log of total assets for bank specific factors. Others factors

    have very little influence on liquidity of banks in India. Cash reserve ratio has a positive and

    expected relationship with liquidity ratios. As such statutory liquidity ratio are not very effective

    instruments of managing liquidity in nationalised banks of India. Supervision of each bank may

    become necessary for proper implementation of regulatory measures in India.

UOW Authors


  •   Bhati, Shyam (external author)
  •   De Zoysa, Anura
  •   Jitaree, Wisuttorn (external author)

Publication Date


  • 2015

Citation


  • Bhati, S., DeZoysa, A. & Jitaree, W. (2015). Determinants of liquidity in nationalised banks of India. World Finance & Banking Symposium (pp. 1-11).

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/837

Start Page


  • 1

End Page


  • 11

Abstract


  • The purpose of this paper is to identify the determinants of liquidity among government owned

    nationalised banks in India. Nationalised banks in India are the biggest group of banks and any

    issue with nationalised banks can have the potential of affecting liquidity of entire banking system

    in India. The data covers a period from 1996 to 2012. Results of OLS regression show that the

    most significant factors influencing liquidity in nationalised banks of India are: call rate, cash

    reserve ratio and statutory liquidity ratio, gross domestic products, among the macroeconomic

    factors and capital to total assets and log of total assets for bank specific factors. Others factors

    have very little influence on liquidity of banks in India. Cash reserve ratio has a positive and

    expected relationship with liquidity ratios. As such statutory liquidity ratio are not very effective

    instruments of managing liquidity in nationalised banks of India. Supervision of each bank may

    become necessary for proper implementation of regulatory measures in India.

UOW Authors


  •   Bhati, Shyam (external author)
  •   De Zoysa, Anura
  •   Jitaree, Wisuttorn (external author)

Publication Date


  • 2015

Citation


  • Bhati, S., DeZoysa, A. & Jitaree, W. (2015). Determinants of liquidity in nationalised banks of India. World Finance & Banking Symposium (pp. 1-11).

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/837

Start Page


  • 1

End Page


  • 11