Banks are financial Intermediaries, which take deposits from surplus sources and invest it in deficit area at a higher rate. This is the primary function of a bank. But bank cannot invest all his money, as some of its deposit should be kept as mandatory reserve of Bangladesh Bank. Also a part of the deposit is required for day-to-day transaction. For making maximum profit Bank have to maintain a proper ratio between its assets and liabilities. As a student of EMBA Banking, in Dhaka University I would like to present on Liquidity VS Profitability in a Bank. In this paper I shall discuss how a bank maintains its safe liquidity as well as earns maximum profit.
To perform the assignment I have considered my self as the manager of south East Bank Ltd. karwan Bazar Branch, Dhaka and Taken the required data. I have considered the branch for my assignment as this branch has all types of business transaction i.e Deposit, Advance, Export & Import. Also this branch does huge ancillary business. From the basis of real transactions of the Bank I analyzed them with hypothetically taken figures.
South East Bank Ltd.
Karwan Bazar Branch, Dhaka
Deposits :
Particulars
|
Amount (In Lac.)
|
Current Deposit
|
397.45
|
Savings Deposit
|
265.70
|
Fixed Deposit :
1)
3 Months
2)
6 Months
3)
12 Months
|
211
522
2363.70
|
Total Deposit 3959.85
|
|
Fund Available for Credit/Advance
1)
Total Deposit :
3959.85 ( In Lac.)
2)
Cash Reserve Ratio (4.5%) : -178.194
3)
Stationary Liquidity Ratio : -534.58
With Bangladesh
Bank (13.5%) : -165.28
4)
Cash in Hand :
-165.28
Fund available for advance : 3081.80
Interest Paid on Deposit :
Types of Deposit
|
Amount (in Lac.)
|
Interest Rate (%)
|
Total Interest (In Lac.)
|
Current Deposit
|
397.45
|
0
|
0
|
Savings Deposit
|
265.70
|
6
|
15.94
|
FDR (3 months)
|
211
|
9
|
19
|
FDR (6 months)
|
522
|
10
|
52.2
|
FDR (12 months)
|
2563.70
|
11
|
282.007
|
Total
Interest : 369.147
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