http://www.scribd.com/doc/24332619/Study-of-Asset-Liability-Management-inIndian-Banks#download 1.

INTRODUCTION
Over the last few years the Indian financial markets have witnessed wide ranging changes at fast pace. Intense competition for business involving both the assets and liabilities, together with increasing volatility in the domestic interest rates as well as foreign exchange rates, has brought pressure on the management of banks to maintain a good balance among spreads, profitability and long-term viability. These pressures call for structured and comprehensive measures and not just ad hoc action. The Management of banks has to base their business decisions on a dynamic and integrated risk management system and process, driven by corporate strategy. Banks are exposed to several major risks in the course of their business - credit risk, interest rate risk, foreign exchange risk, equity / commodity price risk, liquidity risk and operational risks. This note lays down broad guidelines in respect of interest rate and liquidity risks management systems in banks which form part of the Asset-Liability Management (ALM)function. The initial focus of the ALM function would be to enforce the risk management discipline viz. managing business after assessing the risks involved. The objective of good risk management programmes should be that these programmes will evolve into a strategic tool for bank management.

The ALM process rests on three pillars: ALM information systems => Management Information System => Information availability, accuracy, adequacy and expediency ALM organization => Structure and responsibilities => Level of top management involvement ALM process => Risk parameters => Risk identification => Risk measurement => Risk management => Risk policies and tolerance levels

2. PROBLEM DEFINITION
How asset liability management reducing risks in Indian banking sector?

3. RESEARCH OBJECTIVE
Though Basel Capital Accord and subsequent RBI guidelines have given a structure for ALM in banks, the Indian Banking system has not enforced the guidelines in total. The banks have formed ALCO as per the guidelines; but they rarely meet to take decisions. Public Sector banks are yet to collect 100% of ALM data because of lack of computerization in all branches. With this background, this research aims to find out the status of Asset Liability Management across all commercial banks in India with the help of multivariate technique of canonical correlation. The discussion paper has following objectives to explore: To study the Portfolio-Matching behavior of Indian Banks in terms of nature and strengths of relationship between Assets and Liability

To find out the component of Assets explaining variance in Liability and vice versa To study the impact of ownership over Asset Liability management in Banks To study impact of ALM on the profitability of different bank-groups

4. LITERATURE REVIEW Sept 5 ,2007 RBI releases draft norms for asset liability management published in Economic times. Study is carried out about the new norms set by the RBI on mismatch of asset liability of banks. RBI proposed that banks monitor mismatched between their assets and liabilities more frequently for a sharper assessment of liquidity management and providing stimulus to term money market. Earlier banks have to report to RBI every monthly about the mismatches but according to new norms of RBI ,it proposed to spilt the requirement for providing statement of mismatches for 1-14 days into 3 times buckets. Mismatch should not exceed 5 % of cash flow for next day , 10% for 2-7 days and 15% for 8-14 days . The basic idea behind this is a banks outflow should not be more than inflow , so that banks liquidity management will improve.
5. RESEARCH METHODOLOGY The study covers all scheduled commercial banks except the RRBs (Regional Rural Banks). The period of the study was from 1992 2004. The banks were grouped based on ownership structure. The groups were 1. Nationalized Banks except SBI & Associates ( 19 ) 2. SBI and Associates ( 8) 3. Private Banks( 30) 4. Foreign Banks(36)

5.1 Research Design 5.2 Data Collection

1. Nature of Data: Data collection for this research is completely based on the secondary sources of data 2. Sources of Data: The secondary data is mainly collected from the research papers, companys annual reports, websites and Dion database

5.3 Scope and Limitations

6. CURRENT SCENARIO OF THE INDIAN AVIATION SECTOR

Indian Banking Sector Outlook - 2013

Published : January 7, 2013 - Afternoon Despatch & Courier

Indian Banking Sector Outlook - 2013 Over the past couple of years, the Indian banking sector has displayed a high level of resiliency in the face of high domestic inflation, rupee depreciation and fiscal uncertainty in the US and Europe. In order to stimulate the economy and support the growth of banking sector, the Reserve Bank of India (RBI) adopted severe policy measures such as increasing the key monetary policy rates such as repo and reverse repo 16 times since April 2'009 to Oct 2011 and tightening provisioning requirements. Amidst this economic scenario, the key challenge for the Indian banking system continues in improving their operational efficiency and implement prudent risk management practices. Some of the key trends expected to emerge in the near future are as under-Economic slowdown likely to impact the demand for credit High interest rates, subdued industrial production and domestic consumption impacted the growth of the Indian economy which slowed down from 8.4% in FY11 to 6.5% during FY12.The scheduled commercial banks' (SCBs) overall credit grew at a slower pace during FY12 at 17% y-o-y as compared to 21.5% registered during FYll.As per the recent RBI data, the non-food bank credit increased by 15.5% in Oct 2012 over its corresponding month previous year, as compared to 18.2% witnessed in Oct 2011 over its corresponding month previous year. Similarly, credit to industry and services sector recorded a slower growth of 15.2% and 13.7% respectively as against 23.1% and 18.4% during the same period. As per RBI's second quarter review of monetary policy for FY13, the GDP growth estimates for FY13 is revised downwards from 6.5% forecasted earlier to 5.8%.Any further slowdown in the Indian economic growth is likely to impact the demand for bank credit. RBI may lower key policy rates, if inflationary pressures ease Inflation continued to remain sticky and much above the RBI's comfort zone through-out the year. In fact headline inflation as measured by WPI remained above 7.5% from Feb to Oct 2012. As a result the RBI has kept the repo rate at an elevated level, reducing it by 50 basis points only once during 2012, in April-12 to support growth. However, in order to support the flow of funds to the productive sectors of the economy and ease the liquidity crunch in the banking system the RBI has cut the CRR by 175 basis points during the course of the year which stands at 4.25%, as on Nov 2012. Given the easing of international commodity prices, particularly of crude, decline in core inflation as demand conditions moderate, there has been some steady moderation in inflation in the recent period. As a result the RBI might decide to ease the policy rate during end Jan 13. Asset quality will need to be closely monitored During FY12, asset quality of banks was severely impaired, as revealed by the steep increase in non-performing assets (NPAs) of SCBs, particularly for public sector banks (PSBs) owing to their significant exposure to troubled sectors such as power, aviation, real estate and telecom. There was a significant increase noted in the NPA levels during FY12. Gross NPAs value recorded a y-o-y growth of 45.3% and net NPAs registered a y-o-y growth of 55.6% during FY12. As per RBI, this increase was due to inadequate credit appraisal process coupled with unfavorable economic situation in the domestic as well as foreign market.

Apart from increase in NPAs, the weakening asset quality trend was also apparent from the significant increase in restructured assets. Restructured standard advances of the SCBs, recorded a y-o-y growth of around 58.5% during FY12 and the ratio of restructured standard advances to gross advances also increased from about 3.5% in FY11 to 4.7% in FY12. As per the recent data available with CDR cell as on Sep 2012, a total of 466 cases have been referred to the cell, with 327 cases amounting to Rs. 1,873.9 bn have been approved since the start of CDR mechanism. Of the total cases referred, 64 cases corresponding to Rs. 311.2 bn were under finalisation of restructuring packages as on Sep 2012 as compared to 34 cases amounting to Rs. 264.5 bn as on Sep 2011. The slowdown in the economy increases in the risk of default and restructuring of loans can increase which could further lead to deterioration of asset quality. However, implementation of stringent policies could prevent a sharp deterioration in asset quality. Banks will expand In overseas market In order to sustain the business growth amid highly competitive market and slowing Indian economy, banks are likely to expand in the overseas market. They will try to tap emerging opportunities by expanding into newer markets such as Africa, former Soviet region and other South East Asian countries, in which India has maintained good trade relations. They can set up captive operations or expand through inorganic means by undergoing M&A with banks in foreign countries. However, high capital cost for setting up foreign operations can act a deterrent in the way of expansion.

6. OVERVIEW OF THE LISTED INDIAN BANKS 1. ICICI history

2. ICICI Bank was established by the Industrial Credit and Investment Corporation of India, an Indian financial institution, as a wholly owned subsidiary in 1994. The parent company was formed in 1955 as a joint-venture of the World Bank, India's public-sector banks and public[8][9] sector insurance companies to provide project financing to Indian industry. The bank was initially known as the Industrial Credit and Investment Corporation of India Bank , before it changed its name to the abbreviated ICICI Bank. The parent company was later merged with the bank. 3. ICICI Bank launched internet banking operations in 1998.

AWARDS
Airtel, ICICI among 'top 100 global brands'
[50] [51]

ICICI Bank won the "Best Bond House (India) 2011", by IFR Asia ICICI Bank awarded the Best Bank (India) by Global Finance
[52]

ICICI Bank won the "Century International Quality Era Award" at Geneva

[53]

ICICI Bank was awarded the "Best Foreign Exchange Bank (India)" by Finance Asia Country [54] Awards.

ICICI Bank received the "Dataquest Technology Innovation Awards 2012" for Data center migration by Dataquest.