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Risk management in the banking industry

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  1. Introduction
  2. An overview of the banking sector
    1. Risk factors
  3. What is a home loan?
    1. Salient features of home loans
  4. What are the types of home loans available?
  5. What is an EMI?
  6. Risks involved in banking
    1. Types of risks
  7. An introduction to risk management
  8. Steps in risk management process
  9. Objectives of risks management
  10. Risk management in Indian banking
  11. An introduction to Basel II
    1. Basel II norms stand on three pillars
    2. Issues and challenges of Basel II
  12. Risk management and business continuity
  13. Conclusion

?Safe, Secure & Sure' are the three fundamentals of life that are always sought after but seldom achieved. Human who is the only being blessed to analyze & anticipate the future has always been a spectator when it comes to being a perfectionist. As the future has disclosed the unpredictable & unpleasant situations circumstances, human being in spite of his knowledge, skill, technology & ability to sustain has till date remained a subject prone to risk & danger of meeting the unpleasant tune of distress, loss & misinterpreted calculations. Money which has always shared the priority since the time of emergence of this materialistic world has made man & his well being a subject of outmost concentration, consideration & concern to keep a suitable & stable check of all the activities & attributes marking it. This is the only universal truth & fact that relates to common man as well as to a business tycoon in terms of its priority thrust area. The concept of seeking a satisfaction in terms of security & opportunity to earn on a better preposition minimizing the risk to the best possible extent has what contributed to the emergence of the most driving & deterministic variable of the economy of an individual alone & also the net worth of the country's financial strength i.e. the banking sector. The only assure way of making investments & exploiting limited resources to safeguard against mismatch of reality to a fantasized proposal is what guarantees a contract being entered with a bank.

Banks has always remained a backbone to facilitate & implement economic reforms & provide a medium for a common man to make his dreams of earning a respectable & deserving livelihood. Therefore, a well planned, developed, analyzed, implemented & monitored in terms of policies & procedures comprising a well directed approach is required to minimize & check the risk associated with it in terms of efficiency, profitability & above all susceptibility to future trends & requirements.

Tags: Risk management in indian banking industry, Risk management in banking sector, Risk management in Indian banks, Banking risk management

[...] Risk Management in Banking Risk is not something new to the banking and financial service sector exception. The very essence of banking and financial service industry is based on the principle of taking risk. For prudent business management, the entities have to ensure that the risk they take on to themselves are acceptable in terms of the level and the possible loss that they could wreak in the event of an adverse market event. Even absence from the market will not necessarily protect an entity from risk completely- it may reduce the impact but not completely remove it. [...]


[...] Risk management facilitates decision making: By calculating the various parameters involved, wherein a bank decides to give a home loan, it simultaneously facilitates in decision making for the bank & the bank can thus carry out its tasks with minimum risks. Risk management addresses uncertainty: Seeing the fall of Financial Institutions throughout the developed world, one can assume safely that the Banking Sector, which follows such a strict regulatory system, must be least averse to such kind of risks. Risk management takes into account human factors: Risk management facilitates transparency and inclusiveness: Limitations If risks are improperly assessed and prioritized, time can be wasted in dealing with risk of losses that are not likely to occur. [...]


[...] monitored in terms of policies & procedures comprising a well directed approach is required to minimize & check the risk associated with it in terms of efficiency, profitability & above all susceptibility to future trends & requirements. RISK Risk is defined as uncertainty concerning the occurrence of a loss. From the point of view of a bank, security is always a major concern. For example- risk of default from home loans borrowers by giving fake collateral security etc. Further Risk is categorized into objective and subjective risk. [...]

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