Asset Liability Management
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How does banks manage their asset liability.
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Asset Liability Management
- 1. ASSET-LIABILITY MANAGEMENT SYSTEM Presented by c.s.balakrishnan ALM
- 20. IMPACT ON NII Gap Interest rate Change Impact on NII Positive Increases Positive Positive Decreases Negative Negative Increases Negative Negative Decreases Positive
- 32. ALM & BALANACE SHEET LIABILITY (OUTFLOWS) ASSET (INFLOWS) 1 Capital 1 Cash & Balances with RBI 2 Reserves & Surplus 2 Balances with Banks & Money at call/Short-notice lendings. 3 Deposits 3 Investments. 4 Borrowings 4 Advances 5 Other Liabilities & Provisions 5 Fixed Assets. 6 Contingent Liabilities 6 Other Assets.
- 34. THANK YOU
Editor's Notes
- The concept of ALM is concerned with the strategic management of Balance Sheet giving due weightage to all types of market risks viz. Liquidity Risk, Interest Rate Risk and Currency Risk. The objectives of ALM are as below : Define and formulate the ALM Policy of the bank in respect of Liquidity Management, Interest Rate Risk Management and Currency Risk Management. Propose the organizational set-up for implementing the ALM System in the Bank. Adhere to RBI ALM guidelines of February 10, 1999 and implement the Guidelines in phases as required by RBI. Create comprehensive MIS and take data based decisions using modern statistical tools such as Gap Analysis, Duration Gap Analysis, Value at Risk (VaR), Simulation etc.