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Asset Liability Management

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Submitted By arpit1905
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ASSET - LIABILTY MANAGEMENT IN INDIAN BANKING INDUSTRY
DR. ANURAG B SINGH; MS. PRIYANKA TANDON ARTICLE REVIEW
Submitted by:
Arpit Sharma
Roll No. 141
Sec- C

Article discusses the issues in asset liability management and elaborates on various categories of risk that need to be managed. It also examines strategies for asset-liability management from the asset side as well as the liability side, particularly in the Indian context. It also discusses the specificity of financial institutions in India and the new information technology initiatives that beneficially affect asset-liability management. The rise in conglomerate financial services and their implications for asset-liability management are also being described. The research article which is descriptive in nature has been able to successfully describe the concept and application of ALM technique.

Before going into the details of what ALM concept is all about, the article briefly discusses the banking reforms that took place in India in the last two decades and tries to emphasize on the changes that have happened in the Indian Banking Sector.

ALM Concept
ALM is a comprehensive and dynamic framework for measuring, monitoring and managing the market risk of a bank. It is the management of structure of balance sheet (liabilities and assets) in such a way that the net earnings from interest is maximized within the overall risk-preference (present and future) of the institutions. The ALM functions extend to liquidly risk management, management of market risk, trading risk management, funding and capital planning and profit planning and growth projection.

Benefits of ALM
• It is a tool that enables bank managements to take business decisions in a more informed framework with an eye on the risks that bank is exposed to.
• It is an integrated

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