dissertation on risk management in banking sector

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

We're Hiring!
Help Center

First page of “AN ASSESSMENT OF RISK MANAGEMENT IN BANKING SECTOR: A STUDY WITH SPECIAL REFERENCE TO PUBLIC AND PRIVATE SECTOR BANKS IN INDIA”

Download Free PDF

AN ASSESSMENT OF RISK MANAGEMENT IN BANKING SECTOR: A STUDY WITH SPECIAL REFERENCE TO PUBLIC AND PRIVATE SECTOR BANKS IN INDIA

2013, IAEME Publication

In banking sector risk management is a key issue connected to the financial system stability. Banking activities is becoming more complex, compounded by exploding technological capabilities, expanding product offerings and deregulation of competition. In other words, banking is a business of risk. For this reason, efficient risk management is extremely required. In this connection, banks have been moving towards the use of sophisticated models for measuring and managing risks. The Indian banking system is better prepared to adopt Basel II than it was for Basel I due to better risk awareness. The Basel II Accord had led the banks to new prudential norms like capital adequacy and identification of bad debts. Recently many banks have appointed senior managers to oversee a formal risk management function. The effective risk management lies with the ability to gauge the risks and to take appropriate measures. In the light of this, an analysis was carried out to highlight the NPAs position of Public and Private Sector Banks in India. The trend of NPAs in public and private sector banks in the last nineteen years shows that the level of NPAs in relation to the total assets has declined. The extent of NPA is comparatively higher in public sector banks compare to the private sector and foreign banks. The study also focuses on the risk management practices of Public and Private Sector Banks after the implementation of Basel II with the help of capital adequacy ratio for a period of 2007 to 2012. Hence an efficient risk management system is needed.

Related papers

In everyday life, risk is about undesired unpleasant, and at times disastrous prospective events associated with human action or inaction. Banking is becoming complex, compounded by exploding technological capabilities expanding product offerings and deregulation of competition. In other words, banking is a business of risk. For this reason, efficient risk management is extremely required. The Indian banking system is better prepared to adopt Basel II than it was for Basel I. The Basel II Accord had led the banks to new prudential norms like capital adequacy and identification of bad debts. Recently many banks have appointed senior managers to oversee a formal risk management function. The effective risk management lies with the ability to gauge the risks and to take appropriate measures. In the light of this, an analysis was carried out to highlight the NPAs position of SBI and associates and also capital adequacy ratio after the implementation of Basel II Accord to focus on the risk management practices in State Bank of India (SBI) and associates for the period of six years from 2007-08 to 2012-13. Hence an efficient risk management system is the need of time.

Risk is the fundamental element that drives financial behaviour. Without risk, the financial system would be vastly simplified. However, risk is omnipresent in the real world. Financial Institutions, therefore, should manage the risk efficiently to survive in this highly uncertain world. The future of banking will undoubtedly rest on risk management dynamics. Only those banks that have efficient risk management system will survive in the market in the long run. The effective management of credit risk is a critical component of comprehensive risk management essential for long-term success of a banking institution.

IJRAR.ORG, 2023

This research paper provides a detailed examination of the trends and challenges associated with Non-Performing Assets (NPAs) in the Indian banking sector from 2010 to 2021. The study focuses on Commercial Banks, including Public Sector Banks, Private Sector Banks, and Foreign Sector Banks, analyzing their Gross and Net NPAs to Gross and Net Advances. The analysis reveals a substantial expansion in lending activities, as evidenced by the impressive Compound Annual Growth Rates (CAGR) of Gross and Net Advances. However, a concerning increase in Gross and Net NPAs over the same period highlights challenges in asset quality management. Public Sector Banks consistently exhibit higher levels of NPAs compared to their private and foreign sector counterparts, indicating potential difficulties in managing troubled assets. The research identifies a negative trend in NPAs from 2018 onwards, with a gradual decline observed across all categories of commercial banks. Standard Deviation values emphasize greater volatility in asset quality management for Public Sector Banks. Insights from Private Sector Banks, with lower average NPAs, suggest more efficient non-performing asset management practices. The paper concludes with recommendations for reducing NPAs, emphasizing comprehensive risk assessments, robust credit risk analysis, diversification of loan portfolios, and efficient recovery mechanisms. Strengthening due diligence, adherence to prudential norms, continuous staff training, and collaboration with regulatory bodies are also proposed strategies. Ultimately, the research highlights the importance of proactive measures to ensure the sustained health of the Indian banking sector.

The Banking sector has a crucial role to play in the development of an economy. It is the key driver of economic growth of the country. In India, the banking sector is very strong at the present but at the same time, banking is considered to be a very risky business. Most often than not root cause of a financial turmoil is inefficient risk management practices adopted by the financial institutions. Banks must thus see risk management as an ongoing and valued activity as it is directly linked to financial system stability of the country. The purpose of this research is to outline various risks posed by the Indian Banks and strategies adopted by them for risk management. The secondary objective is to compare the risk severity and success of risk management practices for the public sector and private sector Indian Banks.

TEST Engineering & Management

There are dangers in every area of life. Yet it is also true that there is no reward without some degree of risk. As a result, every financial institution strives to control these threats in order to maximize profits while avoiding losses. This, however, is easier said than done. Banks confront a wide variety of risks due to the diverse nature of the transactions they process. Attempts to lessen these dangers are not simple. In light of the current economic situation, it is crucial that banks take steps to reduce the many risks they confront. All contemporary banks have dedicated risk management departments that use statistical approaches to reduce the different risks inherent in the banking industry. This article analyzes Indian banks' risk management practices in light of Basel III requirements.

TIJ's Research Journal of Economics & Business Studies - RJEBS, 2013

Gross NPA of both SBI group & Nationalised Banks exhibit an increasing trend except the year 2008 of Nationalised Banks. As risk management becomes more sophisticated, the simple and static rules of 1998 Accord are becoming less relevant, Emphasis needs to be given on innovative banking. Autonomy is a sine qua non of innovation. Which needed a new capital framework and ways to manage risks. To solve these problems, Basel-II framework is an indicator approach for risk management. The study is based on the secondary data. The scope the study is limited to five years data. The study is related to SBI group and Nationalised banks.

Banks have attained a unique and central role in financial markets through their deposit-taking, lending, insurance, securities brokerage and underwriting, mutual funds and many other services. After the global financial crisis, new regulations have emerged. This has led to a major transformation in risk management in banking. The objective of studying risk management in banking is to understand different types of risks being faced by the banks in the ever changing business environment. The risk management practices should ensure public-protection and also foster efficient and competitive banking system. Indian banks will have to manage the new compliance process laid by Basel committee on Banking Supervision (BCBS) and ensure that the RBI norms are fulfilled so that they can themselves face the new competitive financial risk and regulatory era.

Like other corporations, banks want to create value and seek ways to control risk while aiming to enhance productivity and performance. This is achieved by granting credits to customers from the money deposited by the depositor, thus placing them at risk in the case of defaulting. Despite this risk, banks must continually issue credit since it is the key source of its profitability. This research study assesses the impact of credit risk management on Indian public and private banks during the 2009-2012 period. Using pooled OLS, fixed effects and random effects, the study examines credit risk management in seven private banks and seven public banks. The results show that private banks are more capitalized and more profitable than public banks. In addition, in both cases asset quality measured using non-performing assets with negative coefficients significantly influenced bank profitability. The study extrapolates the importance of regulatory capital and the importance of risk managem...

REST Journal on Banking, Accounting and Business Vol: 1(1), 2022 REST Publisher; ISSN: 2583-4746, 2022

The banking business comprises a paramount component of the financial services sector. then the banks and financial institutions play a vital position and crucial role in economic planning such as two faced down of specific goals and assign particular amount of finance that comprise the economic policy of the government. The financial system is necessary for the growth of economy. The Assets quality ratios to using the financial performance public sector banks supervision criterion of banking sector is a significant and significant improvement in public sector bank in India. The tools used this analysis be CAMEL Rating System in Asset Quality parameters. The public sector banks financial performance in COVID 19 situation facing lot of NPAs issues in present economy. The composite Assets quality rank is Bank of Baroda has occupied the top position with least average. IDBI Bank has availed the last position with an average.

Investigación criminalistica, 2019

Research Journal of English (RJOE), 2022

SSRN Electronic Journal, 2003

Chanut Pornthanaphumiphat, Kotchamon Onpirom, Achiradeth T., Raekkwan Tongsamrit, Ratchanida Aksorn, Sudthikan Ouncharoen, Kuntrarike Chotchavangkun, Kewalin Suraphanpirosh, 2022

Nature Ecology & Evolution

Wiley Online Library

Política & Gobierno, 2023

International Journal of Advance Engineering and Research Development, 2017

Horizonte Independiente. Revista Electrónica de Humanidades, 2023

Bulletin of the Mizunami Fossil Museum, 2010

Cadernos CERU, 2011

Psychopharmacology, 2021

Biodiversitas Journal of Biological Diversity, 2019

World Mycotoxin Journal

Tetrahedron Letters, 2001

Gastroenterology, 2017