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A Study of the Impact of Asset-Liability Management on the Profitability of Banks in India

Author

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  • Mihir Dash

    (School of Business, Alliance University, India)

Abstract

Asset-liability management in banks is the strategic management of assets and liabilities aimed to optimize profitability, while ensuring liquidity, and protecting against different risks. The study examines the impact of asset-liability management on the banks’ profitability for a sample of thirty-five public and private sector Indian banks. The results of the study indicate that most of the banks are exposed to short term risk, with negative maturity mismatches in the 1-90 days bracket, and more so for public sector banks. However, the regression results indicate that there is an incentive to maintain negative maturity mismatch in the short-term, as this improves profitability.

Suggested Citation

  • Mihir Dash, 2013. "A Study of the Impact of Asset-Liability Management on the Profitability of Banks in India," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 2(4), pages 230-234.
    • Handle: RePEc:ods:journl:v:2:y:2013:i:4:p:230-234
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    Citations

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    Cited by:

    1. Saroj Upadhyay & Sudeshna Gupta, 2016. "Taking a Relook into the Decision Making Process in Indian Banking Sector with Respect to Non-Performing Asset Management," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(3), pages 193-202, August.
    2. Mihir Dash & Ravi Pathak, 2016. "Canonical Correlation Analysis of Asset-Liability Management of Indian Banks," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(2), pages 75-81, May.
    3. Anatoliy G. Goncharuk, 2016. "Banking Sector Challenges in Research," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(1), pages 34-39, February.
    4. Anatoliy G. Goncharuk, 2018. "Efficiency vs Effectiveness: Alternative Metrics for Research Performance," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 7(1), pages 24-37, February.
    5. Ziyi Li & Xiaosong Zheng, 2017. "A Critical Study of Commercial Banks' Credit Risk Assessment and Management for SMEs: The Case of Agricultural Bank of China," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 6(2), pages 106-117, May.
    6. Yiyou Wang, 2016. "An Exploratory Study of Interest Rate Liberalization in Commercial Banks in China," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(4), pages 270-279, November.
    7. Ted F. Azarmi, 2017. "Social Costs and Benefits of Structured Products: How Should the German Regulators React to Transparency, Wealth Appropriation, Pricing and Risk in the Local Structured Products Market?," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 6(1), pages 1-4, February.
    8. Umit Karagozlu, 2016. "Managing Risks in Commercial Banks," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(4), pages 250-263, November.
    9. Anna P. Kovalenko, 2016. "The Current Problems of Fixed Assets Management in Ukrainian Energy Companies," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(2), pages 109-112, May.

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