ABSTRACT
Liquidity management is part of the larger risk management framework of the financial service industry, which concerns all financial institutions whether they are conventional or Islamic. Islamic banks in the CIS region follow the same structure and characteristics of a commercial banks’ balance sheet, which means that they are not immune from liquidity risk. The potential mismatch between deposits and investment financing exposes Islamic banks to liquidity problems [1,2]. on the other hand, if the banks maintain too much liquidity to avoid getting into the liquidity problems, it may in turn hurt its profitability. Therefore creating a right balance between the two objectives of safety and profitability is the crux of the liquidity management issue.
