Note that as the operations of Non-Banking Financial Companies (NBFCs) often give rise to the system Asset Liability Management (ALM) has been introduced for the NBFCs.
Further note that the guidelines relating to ALM system would be related to all NBFCs of accepting/holding public deposits or not.
Check whether your company’s asset base is either Rs.100 crores or more no matter of whether your company is accepting/holding public deposits or not or whether your company is holding public deposit of Rs.20 crores.
Adopt asset liability management system of NBFC?
Submit your company’s ALM half yearly return with the RBI.
Ensure that the half yearly returns comprise of the following three sections :
(a) Statement of structural liquidity in format ALM provided in the ALM guidelines.
(b) Statement of short term dynamic liquidity in format ALM provided in the ALM guidelines.
Convene a board meeting after issuing the notices to the directors of your company and constitute an Asset Liability Management committee. The company with members drawn from resources, foreign exchange, investment, credit and Management Information System (MIS) areas by passing a Board Resolution.
Ensure the group with the function of carrying out required spade work for formalizing the ALM system in your company.
The Asset Liability Management Committee consisting of your producer company’s senior management containing the chief executive officer is responsible for securing adherence to the limits set by the Board of Directors of your company as well as for deciding your company’s business strategy on the assets.
The ALM support groups including of operating staff are made responsible for analyzing, monitoring and reporting the risk profiles to the Asset Liability Management Committee.
Have the management committee of your company’s board of directors or any other specific committee constituted by the board of directors oversee the execution of the ALM system and receive its functioning periodically.
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