Evaluation of Cash Management Practices and Liquidity Position of Selected Commercial Banks in Taraba State

Effective cash management is essential for maintaining the liquidity position of commercial banks, particularly in states like Taraba in North East Nigeria, where economic activity is geographically dispersed and cash logistics are more complex than in metropolitan areas. This study evaluates the cash management practices and liquidity positions of commercial bank branches in Taraba State. A descriptive survey design was adopted, and data were collected from 160 bank operations officers and treasury staff across 12 commercial bank branches in Jalingo, Wukari, and Bali Local Government Areas using structured questionnaires and branch liquidity reports for the period 2018 to 2022. Cash management variables included cash ratio, liquidity coverage ratio, cash-to-deposit ratio, and cash recycling efficiency. Descriptive statistics, Spearman correlation, and documentary analysis were employed. Results revealed that the average liquidity coverage ratio across sampled branches was 118.4%, above the regulatory minimum of 100% but with wide branch-level variation. Cash recycling efficiency was low, with an average vault cash turnover of 2.1 times per month, indicating excess idle cash holdings. A significant positive correlation was found between cash recycling efficiency and profitability (rho = 0.58, p < 0.05). The study concludes that cash management practices in Taraba State commercial bank branches require optimisation, particularly in cash forecasting and ATM replenishment planning, to reduce excess vault cash and improve liquidity utilisation efficiency. Keywords: cash management, liquidity, commercial banks, Taraba State, cash recycling