This paper discusses in depth, the importance of liquidity risk management and interest rate risk management, various methods of measuring these risks and the challenges faced by Indian banks in managing these risks. It explains how these risks can be managed through an Asset Liability Management system. This paper discusses issues in asset-liability management and elaborates on various categories of risk that require to be managed. It examines strategies for asset-liability management from the asset side as well as the liability side, particularly in the Indian context. It also discusses the specificity of financial institutions in India and the new information technology initiatives that beneficially affect asset-liability management. The emerging contours of conglomerate financial services and their implications for asset-liability management are also described.