In this research paper our main objective was to find out about how well the banking sector of Oman is managing their liquidity risk by comparing them with some of the leading multinational banks. The liquidity ratios are used to compare the liquidity risk of domestic banks with the multinational banks. The two domestic banks and two multinational banks are considered in our study; Bank Muscat and National Bank of Oman (NBO) as the two leading banks of Oman and two Multinational Banks i.e. HSBC Holding and Standard Chartered Bank (SCB) Group Ltd. Frequently used liquidity ratios were calculated and compared for the period of three years from 2012 to 2014. Study confirms that NBO is better equipped in managing liquidity as compared to Bank Muscat which is highly sensitive to deposit withdrawals risk. On the basis of liquidity ratios the two domestic banks of Oman are weak in liquidity management as compared to their international counterpart .However, Central bank of Oman monitors the liquidity reports of each bank, policies are reviewed and approved by the risk committee of banks. Moreover, the Omani local banks also frequently conduct stress testing based on the market situations and bank conditions as per the standard laid down by the Basel Committee.

In this research paper our main objective was to find out about how well the banking sector of Oman is managing their liquidity risk by comparing them with some of the leading multinational banks. The liquidity ratios are used to compare the liquidity risk of domestic banks with the multinational ba...