Open AccessLiquidity and Off-Balance Sheet Items: A Comparative Study of Public and Private Sector Banks in India
Author(s) -
N. Pushkala,
J. Mahamayi,
K. A. Venkatesh
Publication year - 2017
Publication title -
sdmimd journal of management
Language(s) - English
Resource type - Journals
eISSN - 2320-7906
pISSN - 0976-0652
DOI - 10.18311/sdmimd/2017/15721
Subject(s) - market liquidity , solvency , balance sheet , liquidity crisis , liquidity risk , business , financial system , accounting liquidity , statutory liquidity ratio , off balance sheet , monetary economics , finance , economics
Liquidity is the life-line of every business. Banking business’ liquidity was the bone of contention during the economic crisis of Greece and the downfall of Finance Behemoth like Lehman Brothers. Banking Sector-Illiquidity was the epicentre of such crisis. Globally, the Off-Balance Sheet Exposure played a vital role in managing liquidity and solvency issues of commercial banks. This research paper explores the concepts, aspects, analysis of liquidity and the impact of Off-Balance Sheet Items on Liquidity and Solvency. Furthermore, this paper focuses on the liquidity aspects of Public and Private Sector banks towards scrutinizing whether the ownership has any influence on the liquidity and solvency aspects of the banking structure, under the backdrop of Off-Balance Sheet Exposure. Besides, it looks into the unpredictability of RBI’s policies on liquidity like Cash Reserve Ratio, Statutory Liquidity Ratio etc.