Components –Balance Sheet

Liabilities or Sources:

•Capital- owner`s funds

•Reserves- Statutory, Capital Redemption , Share  Premium, Balance in P& L A/C, Revenue  Res.

•Deposits- SA, CA, FD, RD

•Borrowings- Banks, RBI, Refinance- IDBI, NABARD, EXIM Bank

•Other Liabilities- Bills Payable-Draft., Travellers cheques C, Mail transfer payable , Sundries

•HO cr. Balance

•Contingent Liabilities-Appear as a footnote

Contingent Liabilities



•Co-acceptance of Bills

•Claims Against the bank not acknowledged as Debts

•Liability for partly paid Investments

•Forward Exchange Contract

•Arrears of cumulative Dividends

•Bills Rediscounted

•Underwriting Business

Assets or Uses of Funds

•Cash & Bank Balance in India & abroad

•Balance with RBI-

•Money At Call & Short Notice- up to 15 days


•Advances-CC, OD, TL, DL, BP, BD

•Fixed Assets

•HO Dr. Balance

•Other assets-Intt. O/S On advances, Suspense

 P & L  A/ C- components

INCOME                                  EXPENDITURE

• Interest & Discount          Intt. Paid on Deposit

•Comm./Exch./ Brok           Intt. On borrowings

•Profit on sale of Assets    Establishment cost

•Dividend Earned               Rent Taxes Lighting

•                                      PTG. & STY

•                                       Depreciation

•                                        Advertisement

•                                       Law Charges

•                                        Auditor`s & other Fees

•                                        Insurance


•Components of Balance Sheet

•Components of P&L A/C

•ALM – Most imp. Risk mgt. Function

•Involves matching of Assets & Liabilities-against credit, interest, liquidity & exchange risks.

•It involves decision to hold certain mix of Assets & Liabilities to maximise profits & ensure liquidity

Growing Need for ALM

•Volatility of Interest, Exchange rates & prices of securities

•Innovative products- sweep in sweep out/ Flexi deposit products

•Regulatory guidelines- Basel/ RBI

• Management Awareness

3 Parameters To Monitor ALM

N.I.I= Intt. Income – Intt Exp.

N.I.M. = N.I.I./Average Earning Assets

Economic Equity Ratio=Shareholders   Funds/Total Assets

Be continue…….


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