DHARANA - Bhavan's International Journal of Business

Open Access Open Access  Restricted Access Subscription Access

Asset–Liability Linkages in Managing Bank Funds:An Empirical Analysis


Affiliations
1 Karnatak University, Department of Studies in Commerce, Dharwad, India
2 K.R.C.E.S Degree College, Bailhongal, India
 

Funds management is an integrated approach to match liabilities (sources) and assets (uses). Each source of funding uniquely influences the employment of funds and the overall profitability of banks. Capital funds determine the risk absorption capacity as well as the type of asset(s) to be held by banks. The size and composition of deposits determine the volume of funds to be employed in investments and advances. Efficient management of funds requires mobilization and utilization of funds in a manner that minimizes costs, generates revenue, recovers operational and financial costs, and contributes towards reasonable returns. A mismatch between sources and uses would be imminent with increased linkage of banking operations to market dynamics. Therefore, it is necessary to trace the interrelationship between sources and usage of funds, and make an appropriate design that has a high degree of customer orientation.

Keywords

Sources, Uses, Fund Management, Banks’ Capital Base, Asset-Liability Management.
User
Notifications
Font Size

  • Anju, P. 1994: Financial Management of Commercial Banks – with Special Reference to PNB. New Delhi, South Asia Publications.

  • Bhimal Jalan, 1999: Towards a More Vibrant Banking System: IBA Bulletin, May 1999.

  • Bidani S. N. 2002: Managing Non-performing Assets in Banks. New Delhi, Vision Books.

  • Ganti Subrahmanyam, 1994: Asset, liability Management for Banks in a Deregulated Environment. Prajanan, July 1994.

  • Kaveri V .S. 2001: Loan Default and Profitability of Banks, IBA Bulletin, Jan 2001.

  • Machi Raju H. R. 2001: Modern Commercial Banks. Mumbai, Vikas Publishing house.

  • Nair S. N. 1999: Capital Adequacy Ratio of Banks – The Emerging Scenario, Canara Bank Quarterly Review July, Sept 1999.

  • Sen Gupta A. K. 1995. Loan Policy and Management in Banks. Prajanan. 1994-95.

  • Shrivatava R. M. 2000. Management of Indian Financial Institutions. Mumbai, Himalaya Publishing House.

  • Sinkey Joseph. 1989. Commercial Banks Financial Management. New York, Macmillan Publishing Co.

  • Trivedi A. K. 1998. : Asset, liability Management – A Task to Mandate, IBA Bulletin, Oct, 1998.

  • Toor N. S. 1994. : Funds Management Policies in Banks Challenging Tasks Ahead, PNB Monthly Review. May 1994.


Abstract Views: 234

PDF Views: 85




  • Asset–Liability Linkages in Managing Bank Funds:An Empirical Analysis

Abstract Views: 234  |  PDF Views: 85

Authors

M. R. Shollapur
Karnatak University, Department of Studies in Commerce, Dharwad, India
Y. G. Baligatti
K.R.C.E.S Degree College, Bailhongal, India

Abstract


Funds management is an integrated approach to match liabilities (sources) and assets (uses). Each source of funding uniquely influences the employment of funds and the overall profitability of banks. Capital funds determine the risk absorption capacity as well as the type of asset(s) to be held by banks. The size and composition of deposits determine the volume of funds to be employed in investments and advances. Efficient management of funds requires mobilization and utilization of funds in a manner that minimizes costs, generates revenue, recovers operational and financial costs, and contributes towards reasonable returns. A mismatch between sources and uses would be imminent with increased linkage of banking operations to market dynamics. Therefore, it is necessary to trace the interrelationship between sources and usage of funds, and make an appropriate design that has a high degree of customer orientation.

Keywords


Sources, Uses, Fund Management, Banks’ Capital Base, Asset-Liability Management.

References