An analysis of private banks exposure to asset liability management

Assets and Liability Management (ALM) is a systematic and dynamic process of planning, organising, coordinating and controlling the assets and liabilities or in the sense management of balance sheet structure in such a way the net earnings from interest are maximised within the overall risk preference of the banks. This study examined the effect of ALM on the Five Private Sector Banks profitability in Indian financial market by using Gap Analysis and Ratio Analysis Technique. This paper attempt to assess the liquidity risk that all five Private Sector Banks are exposed to spread over a period from 2011 to 2015. The finding from the study revealed that banks have been exposed to liquidity risk. The study also indicated that HDFC Bank and ICICI Bank have better ALM framework in practice.