Banking beyond Deposits and Loans - How banks manage Liquidity, Treasury and Risk

Where do banks deploy funds apart from loans?Why do banks rely on funding sources other than deposits?Does money moving into mutual funds actually reduce bank deposits in the way many assume?How does loan growth also help create deposits in the banking system?What do episodes like Silicon Valley Bank teach us about liquidity and ALM risk?In this episode of Banking Reframed podcast, eminent banker Ramesh Krishnan explains the less visible side of banking in simple language — treasury, liquidity management, ALM, funding sources, deposit flows, and balance sheet risk.A practical episode for bankers, BFSI professionals, banking aspirants, and anyone who wants to better understand how banks really manage money.******************Timestamp:00:00 – Quick snippets from the episode 02:36 – Guest introduction 04:33 – Why banks cannot lend 100% of their deposits 05:30 – Understanding embedded option risk 06:04 – CRR and SLR explained 09:56 – Why banks invest in instruments other than loans 13:20 – Sources of bank funds beyond deposits 14:05 – Understanding the CD ratio 14:48 – The call money market 15:14 – Repo and TREPS explained 16:06 – Refinance windows for banks 16:39 – Asset securitisation and collateralised debt obligations 19:15 – Reserve-adjusted cost of funds 20:15 – Why equity investments can still impact deposit growth 23:26 – Purchased funds in banking 24:03 – Do bank loans create deposits? 24:35 – The money multiplier explained 26:21 – How money can move out of the banking system: the example of taxes 29:44 – How banks manage funds operationally 32:43 – What liquidity really means in banking 39:54 – Investment risk and ALM risk 41:37 – Tenor vs duration 44:55 – ALM risk examples: Northern Rock and Silicon Valley Bank________________________Host: Srikumar Nair, Co-founder – BygC & formerly senior banker at HDFC BankLinkedIn: https://www.linkedin.com/in/srikumarnair68/Guest: Ramesh Krishnan, formerly GM-Treasury at Karur Vysya Bank LinkedIn: https://www.linkedin.com/in/ramesh-krishnan-09621762/________________________Podcast also available on: Spotify & YouTube