Evaluating Risk Management Practices in Indian Commercial Banks

Abstract

Banking indusliy has witnessed dramatic changes globally in past two decades. Not only profile of the banking sector but also the nature of risk management in banks has changed drastically. Size and .fimctions of banks has increased tremendously and have become varied and complex. The expanded role of banks has given rise to various risk exposures. Market forces are also influencing the banking sector and this has .fi1rther accentuated the risk element. Hence, there lies an imperative needfor the banks to address various risk elements and enhance risk management practices. This research paper is aimed to examine the degree to which Indian banks use risk management practices in dealing with different types of risk and attempt has been made to identify the factors that contribute to Risk Management Practices in banks and to compare Risk Management Practices fo llowed by public sector and private sector banks in India, the empirical study has been conducted and views of employees of various banks have been tested using statistical tools.