Asset liability management (ALM) is a methodology that supervises an institution’s balance sheet to consider various interest rates and liquidity conditions. Financial institutions, including banks, provide services that highlight essential categories of possible hazards, namely credit risk, interest rate risk, and liquidity risk. ALM is a process that offers entities measures to manage such risks effectively. ALM models enable institutions to assess and monitor risk while formulating appropriate strategies for its management. The research investigates the influence of ALM on the profitability of banks. This study selected 10 public sector banks in India. The data were obtained from the annual reports and website for the period 2013–23. The research is founded on analytical investigation. Panel data regression was employed to assess the data. For analysing the data SPSS 26 and EViews 12 and Excel were used. The Hausman test was employed to identify the fixed effect model and the random effect model. In this study, assets and liabilities were treated as independent variables, whereas return on assets (ROA) was designated as the dependent variable. The results indicated that asset variables significantly influenced ROA, with the exception of other assets, but liability variables had a substantial effect on ROA. The research demonstrated that ALM significantly influences the profitability of banks.