Liquidity Management in the Banking System

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Date
1998-07
Authors
BOYI, ALHAJI HAMISU
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Abstract
Community banks, are relatively new concepts in the Nigerian financial system. They represent the second type of banking institutions in Nigeria. The incessant collapse of many banks in Nigeria had been caused by their failure to meet their maturing financial obligations, thus they become bankrupt and unavoidably closed up due to financial strangulation. This is disheartening! the genesis of this occurrence is a poor management of liquidity of such banks. It is against this preposition that this research was undertaken. The major aim of the research is to evaluate Liquidity management in the banking system with reference to some selected community banks. The project will seek to establish the appropriateness of these new banking institutions in meeting their objectives. Principally it wants to asses whether or not Nigerian banks understand and appreciate the importance of prudent management of its cash and marketable securities and see the extent of such practice. It will equally pin point out problematic areas and suggest where appropriate solutions that will make the banks more viable, so as to enable them achieve the objectives for which they were established. The sources and collection of data for the study was approached from different Angles. This includes the use of personal Interview, Questionnaires, Documentation as published in books, Journals, articles, magazines, financial reports and Business times, containing Relevant information on the problem under study. At the end of the work it was discovered that majority of the community banks used for the study accorded less importance to liquidity management, lnfact, all the banks reported working without a standard cash and near cash policy. Rather, they keep their surplus cash in bank deposits than investing them in marketable securities and other profit yielding businesses
Description
A project submitted to the postgraduate school, Ahmadu Bello University, Zaria. In partial fulfillment of the requirements for the award of the degree of Master in Business Administration (MBA) AUGUST, 1998
Keywords
Liquidity,, Management,, Banking System
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