Asset Liability Management in Banks

Deregulation and integration have led banks and financial institutions into competition both on Assets side as well as Liabilities side of the Balance-sheet, forcing them to assume greater and newer risks in their quest for higher returns.Asset Liability Management (ALM) has grown up as a response to the problem of managing modern day business which is exposed to a wide variety of risks in an environment where interest rates, exchange rates and economic conditions are highly volatile.The maturity mismatches and changes in the levels of assets and liabilities cause both liquidity risk and interest-rate risk.The ALM process is the only solution for banks to survive in this rapidly changing environment where the composition and risk profile of their assets and liabilities have a direct impact on their performance and profitability.

Autorentext

Dr.Harpreet Kaur Kohli is an Assistant Professor in the Department of Distance Education,Punjabi University,Patiala.Her research papers have been published in various National and International journals.Her area of specialization is Banking and Finance.Dr.A.S.Chawla is a senior Professor in the School of Management Studies,PunjabiUniversity.