Working Capital of Bank

Working capital of bank iws managed from deposits collected from customers and loans from central bank and various other banks. Major sources of working capitalof any commercial bank consist of the deposits colllected from the account holders.

Working capital, also known as net working capital or NWC, is a financial metric which represents operating liquidity available to a business. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. It is calculated as current assets minus current liabilities.Working capital is known as mention below:

Working Capital = Current Assets − Current Liabilities

When the banks face short term liquidity crisis, they borrow from the money markets.Banks

arrange credit lines with the various foreign banks and local banks to meet their short term fund

requirements.Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses. ... Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable, inventory).