Relationship Between Liquidity Management and Deposit Mobilization of Banks in Nigeria (Published)
This study investigates the relationship between liquidity management and deposit mobilization of banks in Nigeria. The study, which examines the impact of liquidity management measures, including the cash-to-current asset ratio, the current ratio, and the cash reserve ratio, expresses a well-founded view that, while both the cash-to-current asset ratio and current ratio do not significantly affect total deposits, the cash reserve ratio shows a significant positive correlation between it and deposits. These results confirm that cash reserves serve as a primary function for depositor satisfaction and contribute to financial stability. According to the results of the study, banks should make it a point to preserve optimum cash reserves to increase deposits while looking into other issues that could be affecting the way they handle liquidity. The study helps to better understand the liquidity management practices in Nigerian banks and gives viable suggestions for compliance by banks and regulators to liquidity management and deposit mobilization strategies. Future research is suggested for the analysis of the effects of other liquidity levels and some macroeconomic factors on mobile deposit funds.
Keywords: Cash Reserve Ratio, Liquidity Management, Nigerian Banks, cash-to-current asset ratio, current ratio, liquidity indicators