Documente Academic
Documente Profesional
Documente Cultură
Commercial Banking
Asset Liability Management
April 2008
Pre-Financial Sector Reforms (1991)
• Geographical spread of Bank branches
• Directed Investments / Credit Programs
• Administered Rates of Interest
• Accrual based accounting
• Problems of Recovery of Loans
• Deterioration in Quality of Assets /Loans
• Erosion of Profits
• No Computerisation
• Trade Union Issues
Com Bkg 2008 ALM 2008 2
Banking Reforms 1993 onwards
• L-P-G Policy of GOI since 1991
• Technological Changes – ATMs / Internet
• New Products and Services : Competition
• Narasimham Committee - I / II on Financial /
Banking Sector Reforms (1991 & 1997)
• Capital Adequacy Ratio : IRAC Norms : NPAs
• Priority Sector Loans: Reduce from 40 to 10%?
• Reduce SLR (40%) and CRR (15%)
• Benchmark Prime Lending Rates
• Enactment / Amendments to various laws
Liabilities Assets
• Various Risks
– Interest Rate Risk
– Liquidity Risk
– Credit Risk
– Contingency Risk
• In terms of:
Maturities and Interest Rates Sensitivities
• To minimize:
Interest Rate Risk and Liquidity Risk
Com Bkg 2008 ALM 2008 13
Asset Liability Management
Asset Liability
Management Management
5. ALM Organisation
7. ALM Process
Management Committee