IMPACT OF LIQUIDITY RISK ON ORGANIZATIONAL PERFORMANCE OF NEPALESE COMMERCIAL BANKS

Abstract

Nepalese Commercial Banks” aimed to examine the relationship between liquidity risk factors and the organizational performance of Nepalese commercial bank s In the current study, linear multiple regression and bivariate correlation are used to quantify the impacts of explanatory factors on the dependent variables. The information is gathered from the yearly reports of a few chosen commercial banks, the Nepal Rastra Bank report, and other official and unofficial sources. The descriptive research approach is utilized along with the relevant financial and statistical instruments for data analysis. To investigate the link between the independent and dependent var iables, multiple regression analysis and bivariate correlation are used. The analysis is based on information gathered from annual report of 5 commercial banks between the fiscal years 201 3 201 4 and 202 2 202 3 . Using SPSS and MS Excel, calculated data has b een tabulated and examined. In the study, Deposit to Total Assets Ratio (DTA), Non-Performing Loan Ratio (NPLR), and Credit to Deposit Ratio (CDR of Nepalese commercial banks are examined for assessing how liquidity risk influences metrics such as Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM) in the banking sector by using Descriptive Statistics, Correlation and Regression and ANOVA test. The study found that in Nepal's commercial banking sector, DTA positively influenced RO E, while CDR negatively impacted financial performance. NPLR showed a negative correlation with bottom line indicators. Notably, NIM did not significantly affect liquidity metrics studied, highlighting complex relationships in bank liquidity and performanc e.