The Asia Ltd and Mercantile Bank Ltd and

The main purpose of this study is
evaluating the Impact of Fund Management on Banks liquidity, Profitability and
Productivity. The successful management of banks (commercial banks) is very
concerned in consideration of above three objectives.This  study 
covers  five different  private 
commercial  banks(PCBs) and their
names are as follow  Eastern  Bank 
Ltd, Dhaka  Bank Ltd, National
Credit and Commerce Bank Ltd, Bank Asia Ltd and Mercantile Bank Ltd and these
selected banks was in Bangladesh. The main purpose of the selection of the banks
was the easy access and availability of the requisite data and information to
study the Impact of Fund Management on Banks liquidity, Profitability and Productivity.
Both Primary and secondary data are required for study. Secondary data
collected from annual reports of selected banks where as primary data were
collected from executives of the banks. Ahmed and Udine (1994) made
study on “Asset structure and aspects of its management in the Private
Commercial Banks in Bangladesh.” The study was only limited to Five banks as
their names were already mentioned above and this study covered the time of
five years. They identified some most important causes for the variation in the
asset structure of the sample banks such as variation in the deposit mix,
variation in the loan mix etc .Mahmud and Ahmed (1991) have made a study
on “An appraisal of bank lending in Bangladesh. They studied the assets and
labiality structure of bank and their study revealed that as banks are affected
by macro and micro level environment. Nabi and Hasan (1995) has made a
study on “Management of Fund” and this study was only limited to Islamic bank
Bangladesh limited and take the time of five years to complete they examine
that different authorities were involved in fund management and their study
revealed that the process of management of bank fund has been running according
to the rules which are approved by shariah council and everything related to
fund management done in accordance of Islamic frame work and management of
bank  fund is satisfactory . Ahmewd
and Nizame (1993) have made a study on “Comparative Performance on
nationalized and private commercial banks in Bangladesh. This study is only
based on Secondary data macro. They evaluate the performance of banks through
some experiments like performance v/s growth rate, employee performance v/s
profit per employee and compare many other indicators they suggested some
policy which must be implemented such as motivational factor should be ensured.
Ten Variables were used in this study to describe different objectives of the
study. Bank is a profit seeking organization and trying to have the highest
profit by managing its fund. But for more successful and in along term perspective
the profits are not sufficient for a commercial bank and it is  more important to make sure that bank’s
liquidity to be fulfill its obligations on every moment it may be necessary.
The prime function of a commercial bank is to receive deposit and to lend
money. So its first responsibility is to maintain adequate liquidity. If it is
not ensured it definality face some difficulties. Bank liquidity refers to the
ability of a bank or banks to raise a certain amount of fund at a certain costs
with in a certain period of time (Burns,1962)  A bank is technically insolvent the moment it
fails to meet its obligation to convert deposit liabilities into cash
(Wihessly, etal. 1968). Efficient fund management must secure adequate liquidity,
increased profitability, highest and consistent level of income, with
acceptable risk. From study it is revealed 
that the average commercial bank provide 80 percent of deposit as loan.
It means that only 20 percent deposit is available for maintaining the
liquidity and other purposes of Banks and it is also found in the study that
found has a statistical significance between the loan and profitability,
liquidity and productivity for the commercial banks. It is proved in the study
that profitability and productivity is positively related with loan. Increase
of loan in the study has a positive result on profitability and productivity  and negative results on liquidity.

So the study concludes that
providing more loans of the banks and it is the key issue of fund management,
and it is much dependent on their further deposit collection. But lending more does
not always give the guarantee to earn more profit for them. To solve this issue
the study suggests a detail fund management policy. The study suggests for
initiating the efforts that will provide more information regarding credit worthiness
of the borrowers. To improve the knowledge in assessing risks, the banks should
invest more funds in credit research and monitoring. 

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