Asset Liability Management(ALM):
Asset Liability Management (ALM) is an integral part of Bank Management and so, it is essential to have a structured and systematic process for managing the Banance Sheet or the assets and the liabilities of the Bank.
Role of ALM:
ALM is very much concerned with the risk management and provides comprehensive and dynamic framework for measuring, monitoring evaluating and managing liquidity, interest rate, foreign exchange, equity and commodity price risks in the context of Bank's business strategy.
Objectives of ALM:
i) To improve profit and profitability of the Bank
ii) To ensure adequate liquidity and stability of the fund
iii) To ensure optimum lending and investment
iv) To manage and reduce major risks in the banking operations
v) To ensure long term solvency and viability of the Bank
vi) To utilize the assets and the opportunities of the Bank at a optimum level.