Full formBanking & Finance
ALCstands forAsset Liability Committee
Full Form of ALC
What is ALC?
The Asset Liability Committee (ALC) is a strategic management group within banks and financial institutions that oversees the balance sheet risks arising from mismatches between assets and liabilities. In India, every scheduled commercial bank is mandated to have an ALC as part of the asset liability management (ALM) framework prescribed by the Reserve Bank of India (RBI). The committee typically includes senior executives such as the Chief Financial Officer, Treasurer, and heads of credit, treasury, and risk management. Its primary role is to monitor and manage interest rate risk, liquidity risk, and currency risk to ensure the bank's financial stability and profitability. The ALC meets regularly—often monthly or quarterly—to review the bank's asset-liability gap, set pricing strategies for loans and deposits, and decide on investment portfolios. For students preparing for banking exams like IBPS, SBI PO, or RBI Grade B, understanding the ALC's functions is crucial as it frequently appears in questions on risk management and regulatory compliance. The committee also ensures alignment with RBI's guidelines on liquidity coverage ratio (LCR) and net stable funding ratio (NSFR).
ALC का फुल फॉर्म
परिसंपत्ति दायित्व समिति
Example
The bank's ALC decided to reduce the tenure of fixed deposits to better align with the expected rise in short-term interest rates.
ALC — frequently asked questions
What is the full form of ALC?
The full form of ALC is Asset Liability Committee, a key risk management body in banks.
What is the role of ALC in banks?
The ALC manages interest rate risk, liquidity risk, and currency risk by monitoring asset-liability mismatches and setting strategies for loans, deposits, and investments.
Is ALC mandatory for all Indian banks?
Yes, the RBI mandates every scheduled commercial bank to have an Asset Liability Committee as part of its asset liability management framework.