Risk management in Indian banks
What is risk management in Indian banks?
Risk management is a relatively new practice in the Indian banking sector. It began in 1999 when the Reserve Bank of India (RBI) issued guidelines on it. Risk management in Indian banks has already been proved to have increased efficiency in this emerging economy.
Where have you heard about risk management in Indian banks?
Unless you follow the financial news of India, the specific topic is probably new to you. Risk management is, however, something that banks in Europe and the US have practised as regular procedure for many years.
What you need to know about risk management in Indian banks.
Until the early 1990's, commercial banking regulations in India focused more on licensing, capital requirements administration and service pricing, such as interest on bank deposits.
The risk management systems used by Indian banks since the 1999 guidelines were in accordance with standard legal and accounting practices. Today, the Indian economy is growing rapidly. Further deregulation and connected changes in consumer behaviour left banks more exposed. The Indian banking sector recently been rising to the challenge of creating a coherent framework to manage risk that is responsive to market changes.