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18 February, 2022

Asset Liability Management (ALM)

 Asset-liability management (ALM) is the practice of managing risks that arise due to mismatches between the assets and liabilities of the bank. Banks face several risks such as the liquidity risk, interest rate risk, credit risk and operational risk. The ALM is a strategic management tool to manage interest rate risk and liquidity risk faced by banks and financial companies. Its functions extend to the management of  liquidly  risk,  market  risk,  trading  risk,  funding  and  capital planning and profit planning and growth projection