Liquidity management is refers to activities to ensure that holdings of liquid assets like cash, bank deposits and other financial assets are sufficient to meet its obligations. It measures the ability to honor all cash payment as can be met either by drawing from a stock of cash holdings, by using current cash inflows, by borrowing cash or by converting liquid assets into cash. The basic objectives are to honor all cash outflow, satisfy minimum reserve requirements, avoid additional cost of emergency borrowing and forced liquidation of assets.