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Assignment On Different Problems that I faced while dealing with Asset and Liability in Exim Bank Prepared for Dr. Md. Mosharref Hossain Assistant Professor BIBM, Dhaka & Mrs. Tahmina Rahman Assistant Professor BIBM, Dhaka Prepared By Md. Abu Bakr Siddique Exim Bank CDA Avenue Branch Executive Summery 1
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Asset Liability Management is the most important aspect for the Banks to manage Balance Sheet Risk, especially for managing of liquidity risk and profit rate risk. Failure to identify the risks associated with business and failure to take timely measures in giving a sense of direction threatens the very existence of the institution. Implementing Asset Liability Management (ALM) function in banks is not only a regulatory requirement in India but also an imperative for strategic bank management. Profit is becoming the key-factor, it has now become imperative for banks to move towards integrated balance sheet management where components of balance sheet and its different maturity mix will be looked at profit angle of the bank. As I am an employee of Exim Bank I structured all data based on Exim Bank annual report 2018. To analyze asset and liability I stated some key terms such as Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR), Leverage Ratio, Advance to Deposit Ratio (ADR) or Investment to Deposit Ratio (IDR), Commitment and Commitment Limit. And I also structured this data based on Exim Bank Basell iii report 2018. ALCO committee plays an important role to analyze asset and liability of Bank to mitigate market risk, profit rate risk and other risk and also plays a big role to enhance profit and strengthen banks Backbone. When I analyzed Asset liability management of Exim Bank I found few problems dealing with asset and liability. Here I stated the problems elaborately and also discuss how to overcome the problems. Table of Content 2
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Task No. Topics Page No. 3
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Introduction 4 1. Key Terms Of Asset Liability Management and Its application in Exim Bank 4 1.1 Liquidity Coverage Ratio (LCR): 4 1.2 Net Stable Funding Ratio (NSFR): 5 1.3 Leverage Ratio: 5 1.4 Advance to Deposit Ratio (ADR) or Investment to Deposit Ratio (IDR) 6 1.5 Commitment 6 1.6 Commitment Limit 7 1.7 Maximum Cumulative Outflow (MCO): 7 2. Components of Asset Liability Management 7 2.1Asset Management 8 2.2 Liability Management 9 2.3 Risk Management 9 2.4 Capital Management 11 3. Components of Financial Statement 11 4. Asset Liability Management Committee in Exim Bank 13 4.1 Organizational Structure of Asset Liability Management (ALM) Committee 13 4.2 Responsibilities of ALM 14 4.3 Formation of Asset-Liability Committee (ALCO) 14 4.4 Members of ALCO 15 4.5 Functions of ALCO 15 4.6 ALCO Meeting 16 4.7 Special ALCO Meeting 16 4.8 Treasury Department Functions in ALM 17 4.9 ALM Functional Chart 17 5. Problems faced in Dealing of Exim Bank Asset & Liability of Exim Bank 18 5.1 High ID Ratio 18 5.2 Declining Return on Equity 18 5.3 Profit Rate Change Risk 19 5.4 Fixation of Fund Placement Limit with Different Banks 20 5.5 Low Cost and No Cost Deposit 20 5.6 Risk of Industrial Large Investment 21 5.7 Profit on Overdue Investment
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