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Liquidity is basically how much cash is available.

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16y ago

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What is the full form of RLM in RBI terms?

In RBI terms, RLM stands for "Regulatory Liquidity Management." It refers to the measures and tools employed by the Reserve Bank of India to manage liquidity in the banking system and ensure that banks maintain adequate liquidity to meet their obligations. This includes monitoring and regulating the liquidity levels of financial institutions to maintain stability in the financial system.


Why do lenders need liquidity to operate effectively?

Lenders need liquidity to operate effectively because it allows them to meet their financial obligations, such as funding loans and covering withdrawals from depositors. Having sufficient liquidity ensures that lenders can continue operating smoothly and fulfill their role in the financial system.


Why is liquidity important to the financial manager?

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What are the characteristics of Financial asset?

market value, liquidity and volatility


What is the Importance of financial markets in financial system?

Financial markets are important because they allow economic growth by offering liquidity, and this liquidity allows markets to get bigger because it allows demand to be expressed very fluidly and without a very large spread (difference between bid and ask prices). Without this liquidity markets would be at a near stand still and economic growth would be very slow as demand would take a very long time to be expressed.


What provide the necessary information to determine the liquidity of a company?

Financial Statements


Provide the necessary information to determine the liquidity of a company?

Financial statements


What in the world of finance are the three types of liquidity shortages?

Major types of liquidity fall into three major categories: 1. Shortages in central bank liquidity; 2. Specific commercial bank liquidities; 3. Shortages in financial market liquidity.


Discuss the role of RBI in money market?

to keep liquidity in financial markets


What are four major financial ratios?

Liquidity, Profitability, Leverage, and Activity/Efficiency


What can be considered the most destructive type of liquidity shortages in the field of finance?

Although all liquidity shortages can lead to potentially devastating effects on the economy the most destructive type of liquidity shortages occur when confidence in the banking system is shattered. A dysfunction banking system quickly results in a dramatic decline or shutdown of interbank lending and a suspension of lending by banks to cash starved businesses. As panic ripples through the financial system institutions other than banks which are systemically important can quickly become perceived as risky and subject to failure which in turn results in the disappearance of their funding sources. Under these type of stressed financial conditions it is imperative that the central bank rapidly makes loans available to financial institutions in an amount sufficient enough to restore market liquidity.


What is the importance of liquidity to business survival using suitable financial analytical tools?

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