A

SYNOPSIS REPORT
ON
ASSETS AND LIABILITY MANAGEMENT
AT
CANARA BANK LIMITED
Submitted
By
B SUJANTH
H.T.NO: 1302-18-672-152
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE
OF

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

AURORA’S PG COLLEGE (MCA)
RAMANTHAPUR
(Affiliated to Osmania University)
2018-2020
 INTRODUCTION

Asset Liability Management (ALM) is a strategic approach of managing the balance sheet
dynamics in such a way that the net earnings are maximized. 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 CANARA BANK LIMITED

If one has to define Asset and Liability management without going into detail about
its need and utility, 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. The art of proper management of healthy money is
ASSET AND LIABILITY MANAGEMENT (ALM).-

The Liberalization measures initiated in the country resulted in revolutionary changes

in the sector. 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, which forced them to foray into new operational areas thereby exposing
themselves to new risks.

As major part of funds at the disposal of come from outside sources, the management
is concerned about risk arising out of shrinkage in the value of asset, and managing such risks
became critically important to them. Although co-operative are able to mobilize deposits,
major portions of it are high cost fixed deposits. Maturities of these fixed deposits were not
properly matched with the maturities of assets created out of them.

ASSET LIABILITY MANAGEMENT is a portfolio management of assets and

liability of an organization. This is a method of matching various assets with liabilities on the
basis of expected rates of return and expected maturity patter.

In the context of ALM is defined as “a process of adjusting liability to meet loan

demands, liquidity needs and safety requirements”. This will result in optimum value of the,
at the same time reducing the risks faced by them and managing the different types of risks
by keeping it within acceptable levels.
NEED OF THE STUDY

The need of the study is to concentrates on the growth and performance of CANARA BANK
LIMITED and to calculate the growth and performance by using asset and liability
management. And to know the management of non-performing assets.

 To know financial position of CANARA BANK LIMITED

 To analyze existing situation of CANARA BANK LIMITED
 To improve the performance of CANARA BANK LIMITED
 To analyze competition between CANARA BANK LIMITED with other cooperative.
OBJECTIVES OF THE STUDY

 To study the concept of ASSET & LIABLITY MANAGEMENT in CANARA

BANK LIMITED

 To study process of CASH INFIOWS and OUTFLOWS in CANARA BANK

LIMITED

 To study RISK MANAGEMENT under CANARA BANK LIMITED

 To study RESERVES CYCLE of ALM under CANARA BANK LIMITED

 To study FUNCTIONS AND OBJECTIVES of ALM committee.

SCOPE OF THE STUDY
In this study the analysis based on ratios to know asset and liabilities management under
CANARA BANK LIMITED and to analyze the growth and performance of CANARA
BANK LIMITED by using the calculations under asset and liability management based on
ratio.
 Ratio analysis
 Comparative statement
 Common size balance sheet.
RESEARCH METHODOLOGY

The study of ALM Management is based on two factors.

1. Primary data collection.

2. Secondary data collection

PRIMARY DATA COLLECTION:

The sources of primary data were

 The chief manager – ALM cell

 Department Sr. manager financing & Accounting

 System manager- ALM cell

Gathering the information from other managers and other officials of the CANARA BANK
LIMITED

SECONDARY DATA COLLECTION:

Collected from books regarding, journal, and management containing relevant information
about ALM and Other main sources were

 Annual report of the CANARA BANK LIMITED

 Published report of the CANARA BANK LIMITED
 RBI guidelines for ALM.
 LITERATURE REVIEW
2.2 Articles

ARTICLE: 1

TITLE: Interest rate derivatives and asset liabilities management by commercial banks.

AUTHOR: Katherina Simons

JOURNAL DETAILS: International journal of advanced research

ABSTRACT

Bank participation in derivative s market has risen sharply in recent years . The total amount

interest rate , currency , commodity , and equity contracts at US commercial and saving banks

soared from $6.8 trillion in 1990 to $11.9 trillion in 1993 , an increase of 75% . A major

concern facing policy makers and bank regulatory today is the possibility that the rising use

of derivatives has increased the riskiness of individual banks of the banking system as a

whole.
ARTICLE: 2

TITLE: Asset Liability Management

AUTHOR: VAN DEVENDER, IMAI AND MESLER (2004)

JOURNAL DETAILS: International journal of pure and applied mathematics

ABSTRACT

In banking asset liability management is the practice of managing risks that arises due to

mis matches between asset and liabilities of the banks. This can also be seen in insurance.
ARTICLE: 3

TITLE : Asset and liability management on banking institution

SOURCE : WWW.riskarticles.com

AUTHOR : Professor .P. Madhu Sudan Rao

JOURNAL DETAILS: International journal of finance

ABSTRACT

In banking institutions , asset and liability management is the practice of managing various

risks that arise due to mismatches between the assets and liabilities (loans and advances) of

the bank . Banks face several risks such as the risks associated with assets , interest ,

currency exchange risks. Asset liability at tool to manage interest rate risks and liquidity risk

faced by various banks , other financial services companies.

ARTICLE:4

TITLE: Asset Liability Management for Banks

SOURCE: SSRN Electronic Journal

AUTHOR: Rossano Giandomenica

ABSTRACT:

The model by using a contingent claim approach, determines the fair value of the banks liabilities

accounting for the protection and the surrender possibility.Furthermore , it determines the implied

duration of banks liabilities so to show that the surrender possibility will reduce the effective

duration of banks liabilities. imlplications for the immunization are also treated.
ARTICLE:5

TITLE: Asset and Liability Management in fianacial crisis

AUTHOR: Arzu Tektas

ABSTRACT: An efficient asset – liability management requires maximizing bank’s profit as well

as controlling and lowering various risks. This multi-objective decision problem aims to reach goals

such as maximization of liquidity , revenue, capital adequacy, and market share subject to financial,

legal requirements and institutional policies.This paper models asset and liability

management(ALM) in order to show how different managerial strategies affect the financial

wellbeing of banks during crisis.

BIBILIOGRAPHY

Title of the Books Author

1. Risk management Gustavson hoyt

2. Donald E Fischer
Security Analysis Portfolio Management
3. Ronald J Jordan

4. Management Research magazine P.M.Dileep Kumar

5. India financial system M.Y. Khan

Web sites

www.syndicatebank.con

Www.Rbi.Org

Www.Amfiindia.Com

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Www.Bluechipinda.Co.In