Abstract:
The issue of liquidity crisis drew global attention during the recent global
recession after several hundred of commercial banks, including few giants, across
the globe turned bankrupt following cash starvation putting the savings of their
consumers at great stake. Banking sector of Bangladesh faced the ripple effect of the
global financial crisis quite heavily. The issue of adequate liquidity maintenance
became a great concern for the commercial banks ever since. They felt the liquidity
flow issue is of paramount importance to keep the banking system smooth. The study
focused on the liquidity management of six commercial banks under two categories -
Conventional commercial banking and Islamic commercial banking. A comparative
analysis has been carried out to compare the liquidity position of the leading banks
in Bangladesh from the period of 2007 to 2011. The analysis took into account both
the short-term and the long-term liquidity position and also maturity-wise liquidity
position of the six banks. The researchers also analyzed the liquidity position by
using the key performance indicators (KPI) of those banks and observed that in case
of maintaining liquidity, Islamic banks are in better position than the conventional
banks.
