Asset Liability Management in banks aided by advanced technology has resulted in banks managing their liquidity and interest rate risks better than ever before.

The Indian economy recorded a growth of 7.4% in the first quarter of the current fiscal as against 5.3% in the same period last year. In the current year, the economy is expected to record a growth of around 6-7%. The economic indices have shown encouraging trends so far. Industry showed 8% growth with some services like trade and transport posting a growth of 11%. Agriculture grew by 3.4%. Indian exports went up by 26% in the first 5 months of the fiscal year 2004-05 and imports increased by 30%. Oil imports rose sharply at 55% due to the high crude oil prices. Non-oil imports rose by 22%. India's foreign exchange reserves stood at $118 bn during the week ended September 10, 2004.

The growth momentum is likely to pick-up further in the next 6 months. Corporates are finding bank credit attractive this year and there has been a spurt in credit growth. Demand for credit is also coming from agriculture and infrastructure. Thus, banks have a really busy season ahead. Credit growth was quite good even in the first half of the current year. Sustained growth of the economy augurs well for banks both on the liability and asset sides

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