: The term liquidity has caused quite a stir at one time , especially in the banking sector. As the fear of liquidity crisis haunted the banks on the one hand, now there is talk of excess liquidity. Liquidity is the amount of money that can be easily and quickly converted into money. The current account deposit of the bank is a liquid asset , because money can be easily withdrawn from here and it does not cost much. A company or individual will be liquid when a large portion of its assets are available in the form of cash. From 1951 to 1961, the London Clearing Bank had a rule of 30% liquidity of matt deposits, in 1970 it was reduced to 26% and in 1971 to 8%.