ANALYTICAL STUDY ON

ASSET LIABILITY
MANAGEMENT IN SBI
GANIYA MEGHANA(2111510016)
GUIDE: HIMA JAGATHI MAM
 RESEARCH DESIGN

 STATEMENT OF THE PROBLEM:

The State Bank of India (SBI) is one of the largest banks in India with a significant impact on
the country's financial system. As a financial institution, SBI manages a complex portfolio of
assets and liabilities to achieve its strategic objectives while mitigating risks. However,
effective asset liability management (ALM) is critical for banks like SBI to maintain stability,
profitability, and sustainability in a dynamic and volatile financial environment.
The problem is that there is a limited understanding of the ALM practices in SBI, and there is
a gap in the existing literature regarding the comprehensive analysis of the ALM framework,
policies, and strategies employed by SBI. Thus, there is a need for a research design that aims
to investigate the ALM practices in SBI, identify challenges and opportunities, and provide
recommendations for improvement.
 Significance of the Research

 This research design will provide valuable insights into the ALM practices of SBI,
contributing to the existing literature on ALM in the banking sector. The findings of this
research could help SBI and other financial institutions in India and beyond to improve
their ALM framework, policies, and strategies, and make informed decisions to manage
their assets and liabilities effectively. The research could also benefit policymakers,
regulators, and other stakeholders in understanding the challenges and opportunities in
ALM, and formulating appropriate measures for ensuring financial stability and
sustainability in the banking sector. Overall, the research design will contribute to the
knowledge and understanding of ALM practices in SBI, and provide recommendations for
enhancing ALM effectiveness, risk management, and financial performance in the context
of a large public sector bank like SBI.
 OBJECTIVES OF THE STUDY

 To find out how SBI is managing and mitigating interest rate risk with the help of
duration analysis
 To study impact of asset liability management on profitability of banks.
 To study how SBI is placing cash inflows and outflows in maturity ladder with the help of
structural liquidity statement.
 To know how SBI optimizing net interest income by using gap analysis
 SCOPE OF THE STUDY:

 Scope of the study is related to assets and liabilities under the financial management in
SBI Bank. The project involves analysing SBI's ALM policy, guidelines, and procedures
to understand the framework within which the bank manages its assets and liabilities. It
can also include evaluating the effectiveness of ALM practices in managing interest rate
risk, liquidity risk, credit risk, and other relevant risks. The findings which are mentioned
at the end of this project will help bank to analyse it’s mismatching of assets and liabilities
and how to mitigate risks. The recommendations which are given will help bank to take
relevant steps.
 RESEARCH METHODOLOGY

 Analytical research can be utilised in the study by taking the annual reports given by the
organisation. This project involves analysing how company will manage with the risk and
mismatching of assets and liabilities with the help of doing gap analysis and duration
analysis. The study and conclusion made about the subject are based primarily on
secondary data that was gathered through company websites.
 SOURCE OF DATA

 SOURCE OF DATA:
 Secondary data
 Balance sheets of SBI
 Text books and journals
 Websites
Sampling design:
Last 5 years balance sheets are been considered in the study i.e. 2018-2022
Tools and techniques:
 Gap analysis
 Duration analysis
 Structural liquidity statement
Need for the study:
 There is a need to study Asset-liability management because ALM models enable
institutions to measure and monitor risk, and provide suitable strategies for their
management. SBI provide services which expose them to various kinds of risks like
currency risk, credit risk, interest risk, and liquidity risk which will be managed with the
help of ALM techniques and practises
 Limitations of the study:
 data collected is based on the secondary data
 the study is concerned with the available data gathered from annual reports of SBI
 the time period taken for doing research is limited.
 Capital and liabilities

2022      
2021
Capital and Liabilities:          
Total Share Capital 892.46 892.46      
Equity Share Capital 892.46 892.46      
Reserves 255,817.73 229,405.38      
Net Worth 256,710.19 230,297.84      
Deposits 4,051,534.12 3,681,277.08      
Borrowings 426,043.38 417,297.70      
Total Debt 4,477,577.50 4,098,574.78      
Other Liabilities & Provisions 229,931.84 181,979.66      
Total Liabilities 4,964,219.53 4,510,852.28      
 Chart Title
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2021 2022
 Total asset

Asset    
Cash &
Balances      
with RBI
Balance
with Banks,
176,932.42 150,397.18  
Money at
Call

Advances 45,557.69 41,501.46  

2,185,876.9 1,934,880.1
Investments  
2 9
1,060,986.7
Gross Block 967,021.95  
2
Revaluation
38,508.94 39,200.71  
Reserves
Net Block 24,653.94 24,847.99  
Capital
Work In 13,855.00 14,352.72  
Progress
Other Assets 688.63 791.54  

Total Assets 266,327.70 226,994.20  

3,656,260.3 3,429,904.0
   
1 1
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Asset Cash & Balance with Advances Investments Gross Block Revaluation Net Block Capital Work Other Assets Total Assets
Balances Banks, Reserves In Progress
with RBI Money at
Call

2021 2022