ASSET LIABILITY MANAGEMENT IN CO-OPERATIVE BANKS

The inflow outflow of deposits i.e., liability and inflow of loans and investments i.e., assets
has its own pattern. Basically deposit maturity patterns and loan maturity pattern are different back
in time as per commitment. So outflow of liability is assured. But there is no such reliable assurance
for asset incoming. Though the borrower has made commitment to pay back at certain time, the
commitment may not be followed. Premature withdrawal is one more factor. All this crates
mismatches between asset and liability. Mismatch beyond certain point may create problems of
liquidity. Therefore ALM is very important.