CHAPTER-5

FINDINGS, CONCLUSIONS
&

SUGGESTIONS
FINDINGS

1. ALM technique is aimed to tackle the market risks. Its objective is to stabilize and
improve Net interest Income (NII).
2. Implementation of ALM as a Risk Management tool is done using maturity profiles and
GAP analysis.
3. ALM presents a disciplined decision making framework for s while at the same time
guarding the risk levels.
4. For the duration of upto 3 months, the has a positive gap Rs 17226.33 per the year 2014
&Rs72070.18 for the year 2011 however for the year 2014 there is a negative Gap of Rs
62548.39.
5. For duration of 3-6 months, the has a negative Gap of Rs 10606.45 for the year 2013&Rs
30013.31 for the year 2011. In the year 2009 is able to maintain a positive gap of Rs
62467.14.
6. For the duration 6-12 months, the has positive Gap of Rs 17437.43 in the year 2013.
However for the year 2013 & 2014, the Gap is negative.
7. For the time duration of above 1 year the has negative Gap in all the 3 years is Rs 24057.31
In the year 2014, Rs 48585.94 in the year 2011 of& Rs 99572.02 in the year 2014.
8. The company also increased considerably which investors in coming period. The company
has taken up a plant expansion program during the year to increase the production activity
and to meet the increase in the demand

CONCLUSIONS

1.The purpose of ALM is not necessarily to eliminate or even minimize risk .The level
of risk will vary with the return requirement and entitys objectives.

2.Financial objectives and risk tolerances are generally determined by senior

management of an entity and are reviewed from time to time.
3. All sources of risk are identified for all assets and liabilities. Risks are broken
down into their component pieces and the underlying causes of each component
are assessed.
4. Relationships of various risks to each other and/or to external factors are also
identified.
5. Risk exposure can be quantified 1) relative to changes in the component pieces,
2) as a maximum expected loss for a given confidence interval in a given set of
scenarios, or 3) by the distribution of outcomes for a given set of simulated
scenarios for the component piece over time.
6. Regular measurement and monitoring of the risk exposure is required. Operating
within a dynamic environment, as the entitys risk tolerances and financial
objectives change, the existing ALM strategies may no longer be appropriate.
Hence, these strategies need to be periodically reviewed and modified. A formal,
documented communication process is particularly important in this step.