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A STUDY ON ASSETS AND LIABILITY MANAGEMENT AT HDFC BANK

PROJECT WORK AHEAD Project Title: A Study on Asset & Liability Management at HDFC Bank. Hyderabad. The information of the project are interim; the project will be carry on the basis of information required while making a project under the guidance of Project Guide. Name Reg. No Project Guide Management : : : Finance – Asset & Liability S. Shafiq Ahmed.

Area of Specialization :

the management are concerned about RISK arising out of shrinkage in the value of asset. The Liberalization measures initiated in the country resulted in revolutionary changes in the sector. This is a method of matching various assets with liabilities on the basis of expected rates of return and expected maturity pattern. Maturities of these fixed deposits were not properly matched with the maturities of assets created out of them.TOPIC ASSET AND LIABILITY MANAGEMENT Asset Liability Management(ALM) is a strategic approach of managing the balance sheet dynamics in such a way that the net earnings are maximized. The tool called ASSET AND LIABILITY MANAGEMENT provides a better solution for this. . The art of proper management of healthy money is ASSET AND LIABILITY MANAGEMENT (ALM). it can be defined as simply “ management of money” which carries value and can change its shape very quickly and has an ability to come back to its original shape with or without an additional growth. As major part of funds at the disposal of come from outside sources. There was a shift in the policy approach of from the traditionally administered market regime to a free market driven regime. This has put pressure on the earning capacity of co-operative s. major portions of it are high cost fixed deposits. and managing such risks became critically important to them. Although co-operative are able to mobilize deposits. ASSET LIABILITY MANAGEMENT (ALM) is a portfolio management of assets and liability of an organization. This approach is concerned with management of net interest margin to ensure that its level and riskiness are compatible with the risk return objectives of the . If one has to define Asset and Liability management without going into detail about its need and utility. which forced them to foray into new operational areas thereby exposing themselves to new risks.

a strong market reputation. consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards. and to achieve healthy growth in profitability. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. Since its inception in 1977.COMPANY PROFILE The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. professional integrity. Its outstanding loan portfolio covers well over a million dwelling units. the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. large shareholder base and unique consumer franchise. HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. HDFC Bank's mission is to be a World-Class Indian Bank. With its experience in the financial markets. corporate governance and regulatory compliance. . The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited'. as part of the RBI's liberalization of the Indian Banking Industry in 1994. HDFC was ideally positioned to promote a bank in the Indian environment. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. HDFC Bank's business philosophy is based on four core values . India. Product Leadership and People. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments.Operational Excellence. with its registered office in Mumbai. Customer Focus.

ALM cell . risk management and audit & compliance. professional integrity.Mission and Business Strategy: Our mission is to be "a World Class Indian Bank". We are committed to do this while ensuring the highest levels of ethical standards. The objective is to build sound customer franchises across distinct businesses so as to be a preferred provider of banking services for target retail and wholesale customer segments. 2. benchmarking ourselves against international standards and best practices in terms of product offerings. manager financing & Accounting  System manager. service levels. corporate governance and regulatory compliance. Secondary data collection PRIMARY DATA COLLECTION: The sources of primary data were  The chief manager – ALM cell  Department Sr. OBJECTIVES OF THE STUDY  To study the concept of ASSET & LIABLITY MANAGEMENT in HDFC  To study process of CASH INFIOWS and OUTFLOWS in HDFC  To study RISK MANAGEMENT under HDFC METHODOLOGY OF THE STUDY The study of ALM Management is based on two factors. 1. technology. and to achieve a healthy growth in profitability. Primary data collection. consistent with the Bank's risk appetite.

Gathering the information from other managers and other officials of the SECONDARY DATA COLLECTION: Collected from books regarding ing. This subject is based on past data of HDFC 2. LIMITATION OF THE STUDY: 1. and management containing relevant information about ALM and Other main sources were  Annual report of the HDFC  Published report of the RBI guidelines for ALM. P & L a/c. through which I am able to come out with the interpretation for my project. . The analysis is based on structural liquidity statement and gap analysis DATA ANALYSIS: For Analysis purpose. journal. FINDINGS OF THE PROJECT Findings will be shown after analysing the gathered information. different charts and other observation data has been studied like balance sheets.