Banks tend to accept deposits with short term tenors of not more than three years, but at the same time, create assets with longer tenors of between 5 and 20 years under housing finance, vehicle finance, industrial and project finance, infrastructure finance, consortium lending etc. In addition, working capital finance, while technically renewable annually, is, in practice, virtually permanent in nature depending on the health of the borrowing entity. To add complexity to this issue, CASA deposits that by definition are short term and potentially unstable in nature are highly sought after by banks and the growth of this segment is actively encouraged by their managements. A maturity mismatch between a banks assets and liabilities exposes it to uncertainty from constantly fluctuating fund positions and exposes it to the risk of default and liquidity tightness. The pressure to meet asset and liability obligations - particularly at times of market stress - can be challenging.

Task: In the light of the above observations, assess the factors behind this consciously adopted and apparently irrational approach on banks. What do banks need to do to navigate through the rough waters of Asset-Liability mismatches successfully?

Suggest as many remedies as possible.

(You can take 3 days to answer this question but, please make sure to do it properly. It will mean a lot and help. ).