International Journal of Commerce and Management Research

International Journal of Commerce and Management Research


International Journal of Commerce and Management Research
International Journal of Commerce and Management Research
Vol. 6, Issue 5 (2020)

Factors affecting the liquidity of commercial banks in Nepal


Bishnu Prasad Bhattarai

The study has investigates the factors that have affecting the liquidity of commercial banks in Nepal. The panel data were collected of the period of 2013/2014 to 2017/2018 from the 10 sample commercial banks. The study has been employed descriptive, correlational, and casual comparative research design. The data have been analysis with helps of Gretl Statistical Software 1.9.4. The Pooled ordinary least square (OLS) Model, Fixed Effects Model and Random Effect Model has been used to investigate the factors that have affecting liquidity. The liquidity - LIQ (total loan to total deposit ratio) taken as dependent variable whereas capital adequacy ratio (CAR), Non-performing loan ratio (NPL), Profitability (ROA, ROE), size of banks (LnTA), Gross domestic products growth rate (GDP) and inflation rate have been selected for independent variables. The result reveals that the profitability and inflation have significant and negative effect on liquidity. The study concludes that the major determinants of commercial banks' liquidity are profitability and inflation rate in the context of Nepal.
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How to cite this article:
Bishnu Prasad Bhattarai. Factors affecting the liquidity of commercial banks in Nepal. International Journal of Commerce and Management Research, Volume 6, Issue 5, 2020, Pages 01-07
International Journal of Commerce and Management Research