Asset liability management (ALM) is a risk management technique used by banks to maximize earnings by balancing assets and liabilities. It evolved from 1970 to 1990 when banks had more freedom to manage their balance sheets, sometimes resulting in mismatches between assets and liabilities. In 1999, the Reserve Bank of India issued guidelines making ALM mandatory and establishing asset liability management committees to implement ALM processes, monitor risks like funding, liquidity, interest rate, currency, and credit risks, and ensure a bank's assets exceed its liabilities.