Profitability and liquidity:
To be in a position to fulfill needs for money as so when they have been produced bank should never just organize to possess enough money available nonetheless it also needs to circulate its assets in a way that a number of them may be easily changed into money.
Therefore, the bank’s cash reserves can quickly be reinforced in the function of hefty drawings on it. Assets that are readily convertible into money are known as fluid assets, probably the most fluid cash that is being. The shorter the size of that loan the greater fluid since it shall soon grow and become repayable in money; the less profitable because, other activities being equal the interest rate differs directly using the loss in liquidity skilled because of the loan provider. Continue reading In this article we shall talk about concerning the different monetary assets of a commercial bank.