Keywords : Liquidity, Financial Performance, Loan-to-Deposit Ratio, Liquidity Coverage Ratio, and Net Stable Funding Ratio

Abstract : This study looks at how liquidity management affects the financial performance of selected Indian private sector banks. Liquidity management is assessed using important indicators such as Loan-to-Deposit Ratio, Liquidity Coverage Ratio, and Net Stable Funding Ratio, while financial performance is quantified using Return on Equity. Secondary data for 15 observations were gathered from annual reports and regulatory disclosures. Descriptive statistics show that the banks` liquidity positions remain robust and consistent throughout the study period. However, correlation and regression analysis show that liquidity indicators have no statistically significant effect on Return on Equity. The findings indicate that, while good liquidity management is critical for financial stability and regulatory compliance, it does not guarantee profitability. Other criteria, such as asset quality, cost efficiency, and market conditions, are more important in determining financial performance.

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