Abstract: Banks are the lifeblood of today's economy. Banks are crucial in mobilizing economic resources. The performance of banks has a significant impact on overall economic performance. Liquidity and profitability are vital in the banking industry. The bank will be unable to serve daily activities if it does not maintain adequate liquid resources. Excess liquidity will also lead to lower profitability. We attempted to determine the effects of liquidity on the banking sector's profitability in this study. The study uses financial information from 2010 to 2019 from the selected banks. The study mainly focuses on the private commercial banks of Bangladesh. Deposits, loans, and advance and net profit are the variables we focused on for performance analysis. As per outcomes of the performance analysis, profitability ratios like ROA and ROE are on the declining trend. The Loan-to-Deposit Ratio (LDR) is almost stable throughout the year in the banking sector, with no significant fluctuations. A linear regression model has been used to discover the association between loans and advances and net profit. It demonstrates a positive favorable correlation between the variables. The result shows that the banking industry in Bangladesh is heavily reliant on loans and advances for its profitability. If the volume of loans and advances rise by 1 BDT, the net profit rises by 0.03 BDT. It concludes that commercial banks in Bangladesh should be more efficient in managing their resources. Banks should mitigate their cost-to-income ratio (CIR); while incentives should be provided for boosting profitability ratios.