Project Finance on Assets and Liability Management of Different Banks

Project Finance on Assets and Liability Management of Different Banks

Abstract

ALM is a dynamic process of planning, organizing, coordinating, and managing assets and liabilities their mixes, volumes, maturities, yields, and costs in order to attain a defined Net Interest Income. As all bank operations revolve around obtaining and deploying money, Asset-Liability Management (ALM) takes on more importance as a risk management effort by Indian banks. Measuring and managing liquidity risk is a critical aspect of ALM. A mismatch between the maturities of assets and liabilities exposes the balance sheet to liquidity risk. 

The purpose of this study is to use the Gap Analysis Technique to assess the liquidity risk in SBI and affiliated banks in India (maturity profiling). This study tries to evaluate the liquidity risk faced by the sample banks in 2011-2012 using publicly accessible information. According to the results, banks are vulnerable to liquidity risk.

For More Details About Project Finance on Assets and Liability Management of Different Banks Please Visit Our Website


Or call us +91 9481545735

Introduction

In an attempt to optimize profits, Flannery and James (1984) explored the use of asset liability management techniques to maximize the advantage of tax shields. The findings indicate that banks would alter their maturity gaps between loans and deposits in certain cases in order to take advantage of tax breaks and increase profits. Giokas and Vassiloglou (1991) created a goal-programming approach for asset and liability management in banks. They agreed that, in addition to trying to maximize profits, management strives to reduce risks associated with the allocation of the bank's capital, as well as to achieve other objectives of the bank, such as maintaining market share, expanding the amount of deposits and loans, and so on. 

For More Details About Project Finance on Assets and Liability Management of Different Banks Please Visit Our Website


Or call us +91 9481545735

D According to Gosh Roy (1995), in an essay, ALM was popular in the worldwide banking scene in the late 1970s as a strategy for improved profitability and controlling interest rate volatility. With the trend of globalization and deregulation in full swing, Indian banks could no longer avoid managing their assets and liabilities in the short term. According to O P Chawla (1998), ALM evolved from the early practice of managing liquidity on the asset side of the bank's balance sheet to a later shift to the liability side, known as liability management, to a still later realization of using both the assets and liabilities sides of the balance sheet to achieve optimum resource management. That was, however, until the 1970s. ALM in the present decade encompasses the management of a bank's whole balance sheet.


Conclusion

Banks' asset liability management is heavily reliant on the maturity profile of both assets and liabilities. During our research period, i.e., 2011-2012, since the sample banks of our study typically raised resources via short-term liabilities to finance assets ranging from short- to long-term, the liquidity and credit risks increased, especially during crisis times. Because of the opening of the banking domain to global competitors in the Indian environment, as well as the growing penetration of private sector banks, public sector banks, such as SBI & associate in our research, have been forced to focus on profitability at the expense of liquidity. 

However, banks should assess the optimal liquidity risk they can accept, since a very high liquidity risk would have an impact on profitability.

For More Details About Project Finance on Assets and Liability Management of Different Banks Please Visit Our Website


Or call us +91 9481545735

Comments

Post a Comment

Popular posts from this blog

Concept of Call Center as a BPO Process - an Overview

Concept of Call Center as a BPO Process - an Overview INTRODUCTION If your company lacks the capacity to handle all incoming and outgoing calls, it may be time to hire a BPO contact center. Not every business has the personnel, equipment, and expertise necessary to fulfil their customers' contact center service requirements. According to The Zen desk Customer Experience Trends Report 2020, 51 percent of customers anticipate a response in less than five minutes when they contact a business. Meeting this expectation, however, may not always be feasible for a small e-commerce team. That is where a call center for business process outsourcing (BPO) comes in. The act of outsourcing any element of your company's operations to a third-party vendor or service provider is known as business process outsourcing. A business process outsourcing (BPO) call center is a group of outsourced agents that handle incoming and outgoing client calls for other companies. If your company lacks the capa...
Read more

MBA Marketing - Entry Strategy of a New Wine Company in Indian Market

 MBA Marketing - Entry Strategy of a New Wine Company in Indian Market Abstract Let me share with you, in my new role as editor-in-chief of WEP Journal, some of my early experiences. It is my intention to focus on certain significant data and to highlight a few topics that have inspired the authors of the published papers more than others, as they reflect current wine industry concerns. For More Details About    MBA Marketing - Entry Strategy of a New Wine Company in Indian  Market  Please Visit Our Website https://mbareportsguru.com/mba-marketing-entry-strategy-of-a-new-wine-company-in-indian-market/   Or call us +91 9481545735 Introduction Seven issues have been published during this time (including the most recent issue in which this editorial appears), totaling 67 articles out of more than 100 articles submitted to the Editorial Office. Approximately 150 reviewers have been involved in the process over the years, performing thorough and meticulous revie...
Read more

Brand Differentiation Strategies Adopted in Companies.

 Brand Differentiation Strategies Adopted in Companies Abstract  It examines the relationship between differentiation strategy, market competition and profit management. Research on real earnings management was conducted. using to manipulate earnings by many companies We put on a show for each manufacturing sub-sectors, and with ten companies to measure the abnormal. the management of real profits Using 65 manufacturing techniques indonesian companies listed on the Indonesian Stock Exchange between 2011 and 2015, investigate our research questions using regression analyses Our According to the results, firms that use differentiation strategies are less successful than those that don't Real earnings management is likely to be employed. Furthermore, the interaction of two or more entities. For More Details About  MBA Marketing - Study of Cleave Global E – Services Ltd   Please Visit Our Website https://mbareportsguru.com/bra...
Read more