PRESENTED BY:SUBRATA PAUL ROBIN SARMA AKHILESH KARN TRIDIP DUTTA DEBAJIT KASHYAP RATNADIP SUMAN BORA DHRUBA JYOTI DAS PALLAV BORA BIRAJ Ch. KALITA
Asset Liability Management of SBI Asset Management How Liquid are the assets of the Bank
Liability Management How easily can the Bank generate loans from market
Assets
1. Cash & Balances with RBI 2. Bal. With Banks & Money at Call and Short Notices 3. Investments 4. Advances 5. Fixed Assets 6. Other Assets
3. Investments
It includes:
I. Investments in India (i) Government Securities (ii) Other approved Securities
(iii) Shares (iv) Debentures and Bonds ( v) Subsidiaries and Sponsored Institutions ( vi) Others (UTI Shares , Commercial Papers, COD & Mutual Fund Units etc.) 2. Investments outside India in Subsidiaries and/or Associates abroad
4. Advances
The most important assets for a bank. i) Bills Purchased and Discounted ii) Cash Credits, Overdrafts & Loans repayable on demand iii) Term Loans
5. Fixed Asset
I. II. Premises Other Fixed Assets (Including furniture and fixtures)
6. Other Assets I. Interest accrued II. Tax paid in advance/tax deducted at source (Net of Provisions) III. Stationery and Stamps
Liabilities of Bank
1. Capital:
3. Deposits This is the main source of banks funds. The deposits are classified as deposits payable on demand and time. They are reflected in balance sheet as under: I. Demand Deposits II. Savings Bank Deposits III. Term Deposits
4. Borrowings (Borrowings include Refinance / Borrowings from RBI, Inter-bank & other institutions) I. Borrowings in India i) Reserve Bank of India ii) Other Banks iii) Other Institutions & Agencies II. Borrowings outside India
5. Other Liabilities & Provisions It is grouped as under: 1. 2. 3. 4. Bills Payable Interest Accrued Unsecured Redeemable Bonds (Subordinated Debt for Tier-II Capital) Others(including provisions)
It is aimed to stabilize short-term profits, longterm earnings and long-term substance of the bank.
About ALM
ALM is an integral part of the financial management process of any bank. ALM is concerned with strategic balance sheet management involving risks caused by changes in the interest rates, exchange rates and the liquidity position of the bank. While managing these three risks forms the crux of ALM, credit risk and contingency risk also form a part of the ALM . Cont
ALM can be termed as a risk management technique designed to earn an adequate return while maintaining a comfortable surplus of assets beyond liabilities. It takes into consideration interest rates, earning power, and degree of willingness to take on debt and hence is also known as Surplus Management
2. ALM ORGANISATION
ALM organization consists of staff members including CEO.
Management Committee Asset Liability Committee(ALCO) Asset Liability Management Cell Finance Planning Department Credit Analysis Credit risk Management INVESTMENT AND LOAN DEPARTMENT Treasury
Functions of ALCO
ALCO develops ,implements and manages banks annual budget for profit plan and risk management programme. Timely, accurate data and analysis is a must for ALCOSS success.
SUCCESS OF ALM
The success of ALM depends on the following: 1. Awareness for ALM in the Bank staff at all levelssupportive Management & dedicated Teams. 2. Method of reporting data from Branches/ other Departments. (Strong MIS). 3. Computerization-Full computerization, networking. 4. Insight into the banking operations, economic forecasting, computerization, investment, credit. 5. Linking up ALM to future Risk Management Strategies.
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