Asset Liability Management

Asset Liability Management is one of the major functions of Community Bank Bank Treasury. Community Bank has a highly efficient ALM Desk, which is an independent unit within the Treasury Department.

The ALM function comprises management of liquidity, maturity profiles of assets and liabilities, interest rate risks and forex risk. ALM desk officials prepare ALCO paper incorporating local and international economic update, market liquidity forecasts, interest rate projections, balance sheet analysis and recommend measures to be taken to optimize balance sheet whether to reduce or increase deposit and lending rates.

ALM desk guides ALCO in changing lending and deposit rates with proper analytics and better forecasts. A new ALM policy was formulated by ALM desk keeping BASEL III liquidity ratios (LCR & NSFR) in mind and central bank’s ALM guidelines into active consideration. Change in deposit mix reducing dependency on term deposit reduced substantial costs for the bank.