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Book Keeping &Book Keeping &
Maintenance ofMaintenance of
AccountsAccounts
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On daily basis
Subsidiary books like personal ledgers and billregisters
Day Book
Department Specific Books Receiving Cashiers cash book
Paying Cashiers cash book
Main Cash book
Cash Balance book
Others
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Payment SystemPayment System
Quick Payment System
Onward Clearing
Inward Clearing
Image Based Clearing
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ALMALM
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ALM is a system of matching cash inflows
and outflows, and thus of liquidity
management. Hence, if a bank meets its
cash reserve ratio and statutory liquidity
ratio stipulations regularly without undueand frequent resort to purchased funds, it
can be said to have a satisfactory system of
managing liquidity risks, and, hence, ofALM.
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The actual concept of ALM is however
much wider, and of greater importance tobanks' performance. Historically, ALM has
evolved from the early practice of
managing liquidity on the bank's asset
side, to a later shift to the liability side,termed liability management, to a still later
realization of using both the assets as well
as liabilities sides of the balance sheet toachieve optimum resources management.
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ALM is a risk management tool that helps a
bank's management take investment /disinvestment decisions, maintain the requiredstatutory liquidity ratio (SLR), credit reserve ratio(CRR) and other ratios as per Reserve Bank of
India (RBI) guidelines. It generates the Structural liquidity profile (SLP)Interest rate sensitivity (IRS) Maturity andposition (MAP) Statement of interest ratesensitivity (SIR) reports and supports riskmanagement modules like graphical analysis,data analysis and interest rate simulation.
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RBI Model of ALMRBI Model of ALM
Based on GAP Analysis, subsequently VaR andDuration analysis. Global regulations governingthe credit risk given in the Basel Accord aretaken into consideration.
Segregate the assets and liabilities into variousmaturity buckets and identify those which areinterest sensitive
RBI has given a benchmark for liquidityrequirement in certain cases. If adequateinformation is available regarding maturitypattern of assets and liabilities, liquidity limit fordifferent buckets could be set.
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On the basis of past experience they can
assess the liquidity requirements of different
savings and current accounts.
They can project movement of interest rate
and exchange rate in future.
For Ex: in the case of export refinance RBIhas stipulated that maturity profile of the
availed portion of export refinance has to be
based on the underlying assets
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Broadly, there are 3 requirements to
implement ALM in these banks, in the
stated order: (a) developing a better
understanding of ALM concepts, (b)
introducing an ALM information system,
and, (c) setting up ALM decision-makingprocesses (ALM Committee/ALCO).
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Banking ServicesBanking Services
Permitted Business
Prohibited business
Direct or indirect trading activities and undertakingtrading risk unless held by it
Possessing immovable property for more than 7+5
years.
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Nature ofBanking OperationsNature ofBanking Operations
Mobilize Deposits Demand deposit
Time deposit
Utilize the deposit for lending Overdraft, Demand loans, Cash Credit
Discounting Bills of Exchange
Secured advance & Unsecured or CleanAdvance