Keywords: Asset-Liability Management, Risk Management, Goal Programming, Banking.


In earlier years, there was abundance of funds in banks in the form of demand and savings deposits. Hence, the focus of banks was mainly on asset management. But intense competition and volatility of interest rate due to banking reforms reduced the availability of low-cost funds and therefore, banks focused on liability management as well. These pressures call for structured and comprehensive measures and not just ad hoc action. This is how banks started to concentrate more on the management of both sides of the balance sheet. As a result, the concept of asset-liability management originated in India and introduced in the Indian banking industry since 1st April 1999 to administer the risk management aspects. This paper attempts to optimize assets and liabilities of banks using goal programming technique. Secondary data is collected from annual reports of Allahabad bank from 2010-2019 and RBI website is used for modelling. The findings show that in Allahabad bank, goal programming help in achieving optimization and increase profitability. The model incorporating constraints and set objectives. It model can support banks in decision making process, planning, budgeting, and forecasting. An attempt is made to use realistic goals and constraints after discussing with bank officials.

JEL Classification Codes: C61, G21, G32.

Author Biographies

Jyoti Tanwar, BITS-P

Senior Research Scholar, Department of Economics and Finance, BITS-Pilani, Pilani Campus, Jhunjunu, Rajasthan- 333031, India

Arun Kumar Vaish, BITS-P

Assistant Professor, Department of Economics and Finance, BITS- Pilani, Pilani Campus, India


Professor, Department of Economics and Finance, BITS-Pilani, Pilani Campus, India


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How to Cite
Tanwar, J., Vaish, A. K., & Rao, N. (2021). OPTIMIZING BALANCE SHEET FOR BANKS IN INDIA USING GOAL PROGRAMMING. International Journal of Accounting & Finance Review, 6(2), 81-101. https://doi.org/10.46281/ijafr.v6i2.1082
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper