EXECUTIVE SUMMARY : Liquidity management is a concept that has been receiving serious attention all over the world especially with the current financial situations and the state of the world economy. Liquidity is an ability of the bank to pay its short-term obligation to its depositor and creditors (Eljelly, 2004). Nwaezeaku (2006) argued that liquidity in banking measures the availability of cash and the rate at which current assets are converted into cash to meet ordinary and extraordinary request. Liquidity shortage can cause great damage to a banks operation (Ogbuabor and Malaolu, 2013). When crises are likely to arrive, banks seem less willing to lend and hold more liquidity due to the low level of liquidity in the market for external finance (Acharya and Naqvi, 2012). Stakeholders have interest in the liquidity position of a bank. Banking firm should ensure that it does not suffer from lack of or excess liquidity to cover up its short term obligation (Kurawa and Abubakar, 2014). Kumar and Yadav (2013) described liquidity as a bank capacity to increase fund in assets and meet both expected and unexpected cash and collateral obligation at reasonable cost and without incurring unacceptable losses. 
There are differences in public sector bank, joint venture banks and domestic private banks in terms of liquidity, non-performing loan, return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and Treasury bill rate. Chagwiza (2014) supported that there is a positive link between bank liquidity and capital adequacy, total assets, gross domestic product whereas liquidity is negatively correlated with inflation. Singh and Sharma (2016) revels thatbank size and GDP were found to have a negative effect on bank liquidity. Aral (2005) argued that high level of liquidity is deteriorating profitability. 
The major objective of the study is to assess impact of bank specific factor and macroeconomic factor on the liquidity of Nepalese commercial banks. The study is based on secondary data of 10 commercial banks with 60 observations for the period of 2011/12 to 2016/17. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial bank. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals with assess impact of bank specific factor and macroeconomic factor on Nepalese commercial bank liquidity.
In case of public banks, the study concludes that non-performing loan, return on assets, bank size, inflation and Treasury bill rate has negative relation with liquid assets to total assets. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total assets. On other hand the study shows that non-performing loan, return on assets, inflation and Treasury bill rate has negative relation with liquid assets to total deposit. Similarly, capital adequacy ratio bank size, and gross domestic product has positive relation with liquid assets to total deposit. In case of joint venture banks, the study finds that non-performing loan, return on assets, bank size, and Treasury bill rate has negative relation with liquid assets to total assets. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total assets. On other hand the study shows that non-performing loan, return on assets, bank size, inflation and Treasury bill rate has negative relation with liquid assets to total deposit. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total deposit. The result shows that non-performing loan, return on assets, bank size, gross domestic product and Treasury bill rate has negative relation with liquid assets to total
assets of private banks. Similarly, capital adequacy ratio and inflation has positive relation with liquid assets to total assets of private banks. On other hand the study finds that non-performing loan, return on assets, bank size, gross domestic product and Treasury bill rate has negative relation with liquid assets to total deposit of private banks. Similarly, capital adequacy ratio and inflation has positive relation with liquid assets to total deposit of private banks. 
The regression result shows that non-performing loan, return on assets, bank size, inflation and treasury bill rate have negative and significant impact on liquid assets to total assets in case of public banks. Similarly, capital adequacy ratio and gross domestic product has positive impact on liquid assets to total assets in case of public banks. On other hand the study finds that nonperforming loan, return on assets, inflation and treasury bill rate has negative beta coefficient with liquid assets to total deposit in case of public banks. Similarly, capital adequacy ratio bank size, and gross domestic product has positive and significant impact on liquid assets to total deposit in case of public banks. Likewise, the study finds that non-performing loan, return on assets, bank size, and treasury bill rate has negative impact on liquid assets to total assets in case of joint venture banks. Similarly, capital adequacy ratio, gross domestic product and inflation has positive beta coefficient with liquid assets to total assets in case of joint venture banks. On other hand the study finds that non-performing loan, return on assets, bank size, inflation and Treasury bill rate has negative and significant impact on liquid assets to total deposit. Similarly, capital adequacy ratio and gross domestic product has positive beta coefficient on liquid assets to total deposit in case of joint venture banks. The result shows that non-performing loan, return on assets, bank size, gross domestic product and Treasury bill rate has negative impact on liquid assets to total assets of private banks. Similarly, capital adequacy ratio and inflation has positive impact on liquid assets to total assets of private banks. On other hand the study finds that nonperforming loan, return on assets, bank size, gross domestic product and Treasury bill rate has  negative impact on liquid assets to total deposit of private banks. Similarly, capital adequacy ratio and inflation has positive and significant impact with liquid assets to total deposit of private banks. 

ACKNOWLEDGMENTS 
This study entitled “Factors affecting liquidity of commercial banks in Nepal” has been conducted to satisfy the partial requirement for the degree of Masters of Business Administration (Finance), Pokhara University.  First and foremost, I offer my sincerest gratitude to my supervisor Mr. Dipendra Karki for his valuable supervision and guidance in completing this study. I am ineffably indebted and very thankful for his continuous support and constructive suggestions for finalization of this research