A Study on Asset and Liability Management of HDFC Bank Limited

SSRN Electronic Journal, 2000

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Asset Liability management of a bank refers to strategic decision making and devising strategies with respect to mitigation of different types of risk with a core objective of risk minimization and profit maximization. Banks are exposed to varied types of risk of which credit risk is crucial as it enhances the risk of insolvency and bankruptcy of a bank. It arises when borrowers turn out to be defaulters. Credit risk not only wipes out the capital of the banks but also hampers the present and future earnings of the bank. The present paper analyzes the credit risk of selected private sector banks to know if the Asset Liability management (ALM) policy of a bank with respect to credit risk is effective or not. The different measures of Credit risk as Gross Non-performing assets and Net Nonperforming assets are analyzed using One-Way Anova to see if credit risk of selected banks is significantly different or not.

International journal of academic research in business & social sciences, 2023

Financial stability in the Malaysian Islamic banking sector is a popular issue that should be given attention by all financial service practitioners, including bank management, regulators, and popolicymakersIn this regard, Islamic banking institutions are stable not only in terms of their ability to be resilient, but also in their financial stability when it concerns their smooth functioning as effective intermediaries. However, to achieve the goals for stability, the Islamic banking sector often faces a mismatch between assets and liabilities, which may contribute to financial instability. Based on the above-mentioned issues and problems, the objective of this study is to describe the asset and liability management practices in Malaysian Islamic banking institutions. To achieve these objectives, the study used methods of estimation on a panel data set (a combination of time series and cross-section) which contains 211 observations from 16 Islamic banks (full-fledged Islamic banks) in Malaysia from 1997 to 2016. The model estimation results showed that the profitability of Islamic banking is influenced by various factors such as asset quality, liquidity, financing, credit risk, deposit ratio, zakat, other liabilities, and capital adequacy. The study found that the asset quality ratio variable has a positive relationship with the profitability of Islamic banking, while the total asset ratio variable has a negative relationship. The liquidity ratio variable, on the other hand, has a positive relationship with the profitability of Islamic banking. The article concludes that these findings have implications for the management of assets and liabilities in Islamic banking,

Pacific Business Review, 2022

The concept of liquidity management by the commercial bank indicates the capability of the bank to finance its commitments as and when it gets due, comprising of investment and lending obligations, withdrawals, and other ensued burdens. The effectiveness and efficiency of the banks are majorly the function of its management of the liquidity. Therefore, for managing the short-term obligations, it is of vital importance for the banks to keep a desired liquidity ratio. The decisive objective is to maintain desired balance between liquidity and profitability. Against this backdrop, a sincere effort is being made in this research paper to study the impact on the profitability owing to the prudent liquidity management by the Indian banking sector. Accordingly, various banks from the board spectrum were selected as per the need of the research study comprising of public sector banks (27), private banks (20) and foreign banks (15). The independent variable includes Credit-Deposit Ratio (CRDR), Investment-Deposit Ratio and Cash-Deposit Ratio (CDR), which indicates the Banks' management of liquidity. On the other hand, for gauging the profitability, Return on Equity (ROE) and Return on Assets (ROA) are taken as proxy. Based on the research, statistically no significant relationship found between the liquidity of all the types of banks operating in India and profitability, factoring in all the variables. In the research, coefficients of the regressors found to be negative are for all the types of banks (Public, Private and Foreign). Nonetheless, the relationship lacks statistical significance.

International Journal of Banking, Risk and Insurance, 2018

Banking sector is accepted as the main motivator in socio-economic upgradation of any country especially developing one like India. Commercial banks, specially their public domain, introduce the assistance programme to society under the portfolio of commercialisation and socialisation. Public sector banks play a pivotal role in framing the socio-economic development of our country by including all financially excluded poor populace at soft terms and conditions under their purview. But in this very effort, the said banks have to face extreme pressure due to lesser amount of deposit than advance, wilful default etc. which may have high impact on their liquidity position and thus would force them to face sustainability crisis in its professional field of activity. Therefore, to carry on a smooth operation in competitive environment, public sector banks would have to maintain a steady flow of liquidity which can be judged through some basic financial ratios. The present paper aims at (i) assessing the consistent position of the public sector banks (listed in BSE 23.06.2016) in liquidity aspects during the period 1999-2000 to 2015-2016, (ii) making a bank-bank, bank-group (size of bank), and bank-sector comparative analysis on the liquidity position throughout the specific period, and (iii) examining any difference between and within at least two selected banks on liquidity aspects by applying some relevant statistical tools and techniques.

The Covid'19 has impacted many businesses and one among them is banking sector. This study is used to determine the impact of Covid' 19 in bank liquidity and loan portfolio. The liquidity is defined as measure of the cash and other assets banks have to quickly pay bills to meet short terms debts. Loan Portfolio Performance (lending)is the major business of the bank .in this study to know the performance of liquidity over loan portfolio performance.

Turkish Online Journal of Qualitative Inquiry (TOJQI) Volume 12, Issue 1, January 2021: 456-469, 2021

The Indian banking sector has faced major challenges with the rise in non-performing assets (NPAs). The growth of NPAs has a direct impact on the profitability of banks. Non-performing assets are one of the major concerns of scheduled commercial banks in India. NPAs affect liquidity and profitability, in addition to threatening the quality of assets and survival of banks. The problem of NPAs affects not only banks but also the entire economy. There is a need to reduce NPAs to improve the financial viability of the banking system. An effort is being made in this article to learn the status of gross NPA and net NPA of commercial banks in India. In addition, researchers have investigated the growth rate of NPA of commercial banks in India. Finally, an attempt has been made to analyse the impact of NPA management on the liquidity position of commercial banks in India. KEYWORDS: Non- Performing Assets, liquidity, profitability, commercial banks, Gross NPA JEL Codes: E58,G20, G21,G33

The purpose of this study is to establish the firms level aspects which have more influence on the Credit risk managing of domestic and foreign banks in Pakistan. The study is based on secondary data from the period of 2001 to 2010. To check the stationarity of the data, Augmented Dickey Fuller test is used and Johansson’s Co-integration is used for long run relationship. Linear regression model with OLS techniques is used for analysis. The relationship of bank size with liquidity risk is negative and significant in domestic banks and negative and insignificant in foreign banks. The relationship of debt to equity ratio with liquidity risk is negative and significant both in domestic and foreign banks. The relationship of liquid assets with liquidity risk is negative and insignificant in domestic banks and positive and significant in foreign banks. Based on the findings of the study it is recommended to establish more branches of domestic and enhance debt to equity ratio in order to liquidity risk.

Journal of Business Economics and Management, 2006

Liquidity, or the ability to fund increases in assets and meet obligations as they come due, is crucial to the ongoing viability of any banking organization. Therefore, managing liquidity is among the most important activities conducted by banks. Liquidity management model proposed by the authors can reduce the probability of serious problems. Indeed, the importance of liquidity transcends the individual bank, since a liquidity shortfall at a single institution can have system-wide repercussions. For this reason, the analysis of liquidity requires bank management not only to measure the liquidity position of the bank on an ongoing basis but also to examine how funding requirements are likely to evolve under various scenarios, including adverse conditions. The authors have focused on developing a greater understanding of the way in which banks can manage their liquidity using a broad potential of integrated asset and liability portfolio. As instrument for the solution of the assessed problem the integrated total commercial bank asset and liability structure formation and management when useful occurrence of integrated structure and every outcome is followed with some guarantee to occur was chosen. An academic example is shown as an illustration for ideas analyzed. The formality and sophistication of the process used to manage liquidity depends on the size and sophistication of the bank, as well as the nature and complexity of its activities. The principles focused in the paper have broad applicability to all banks. In particular, good management information systems, analysis of net funding requirements under alternative scenarios, diversification of funding sources, and contingency planning are crucial elements of strong liquidity management at a bank of any size or scope of operations.

IRA-International Journal of Management & Social Sciences (ISSN 2455-2267), 2016

Commercial Banking System occupies a unique position in the Indian financial system. The practice of banking in our society is not something that can be refined to a set of given rules and formulas applicable to a static economy but an art to be pursued in a dynamic economy with a public, yet profitable, service as the end result. The overall environment today is much more challenging and much more difficult than the yesteryears. It is rather difficult to determine the relative priority that exists in the mind of a commercial banker between the concepts of liquidity and profitability, as the bank can’t operate for a long duration without either of them. Modern commercial banking is an exacting business where the rewards are modest; the penalties for bad banking are enormous. Profitability is of concern to any going business enterprise, the lack of which would result in wide criticism to the banker by the shareholders while lack of liquidity, which is peculiar to the banking system, ...