In commercial banking operations,there is a trade-off between liquidity and profitability.

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Commercial banks need to maintain a certain level of liquidity to meet the customers' demand for withdrawals and to fulfill regulatory requirements. However, holding too much liquid assets may result in lower profitability as these assets generate lower returns. Therefore, banks have to balance between maintaining adequate liquidity and maximizing profitability.

In Commercial Banking Operations,there Is a Trade-Off Between Liquidity and Profitability