Risk Management in Banks
SYNOPSIS
[pic]
A Project Report on
“Credit Risk Management in Kotak Mahindra”
SUBMITTED TO
SUBMITTED BY
Jaya Sree
CONTENTS
1. Introduction. 2. Objectives. 3. Limitations. 4. Methodology. 5. Reference
Introduction of the Topic:
CREDIT: The word ‘credit’ comes from the Latin word ‘credere’, meaning ‘trust’. When sellers transfer his wealth to a buyer who has agreed to pay later, there is a clear implication of trust that the payment will be made at the agreed date. The credit period and the amount of credit depend upon the degree of trust.
Credit is an essential marketing tool. It bears a cost, the cost of the seller having to borrow until the customers payment arrives. Ideally, that cost is the price but, as most customers pay later than agreed, the extra unplanned cost erodes the planned net profit.
RISK : Risk is defined as uncertain resulting in adverse outcome, adverse in relation to planned objective or expectation. It is very difficult o find a risk free investment. An important input to risk management is risk assessment. Many public bodies such as advisory committees concerned with risk management. There are mainly three types of risk they are follows • Market risk • Credit Risk • Operational risk
Risk analysis and allocation is central to the design of any project finance, risk management is of paramount concern. Thus quantifying risk along with profit projections is usually the first step in gauging the feasibility of the project. once risk have been identified they can be allocated to participants and appropriate mechanisms put in place. [pic]
MARKET RISK: Market risk is the risk of adverse deviation of the mark to market value of the trading portfolio, due to market movement, during the period required to liquidate the transactions.
OPERTIONAL RISK: Operational risk is one area of risk that is faced by all organization s.
[pic]
A Project Report on
“Credit Risk Management in Kotak Mahindra”
SUBMITTED TO
SUBMITTED BY
Jaya Sree
CONTENTS
1. Introduction. 2. Objectives. 3. Limitations. 4. Methodology. 5. Reference
Introduction of the Topic:
CREDIT: The word ‘credit’ comes from the Latin word ‘credere’, meaning ‘trust’. When sellers transfer his wealth to a buyer who has agreed to pay later, there is a clear implication of trust that the payment will be made at the agreed date. The credit period and the amount of credit depend upon the degree of trust.
Credit is an essential marketing tool. It bears a cost, the cost of the seller having to borrow until the customers payment arrives. Ideally, that cost is the price but, as most customers pay later than agreed, the extra unplanned cost erodes the planned net profit.
RISK : Risk is defined as uncertain resulting in adverse outcome, adverse in relation to planned objective or expectation. It is very difficult o find a risk free investment. An important input to risk management is risk assessment. Many public bodies such as advisory committees concerned with risk management. There are mainly three types of risk they are follows • Market risk • Credit Risk • Operational risk
Risk analysis and allocation is central to the design of any project finance, risk management is of paramount concern. Thus quantifying risk along with profit projections is usually the first step in gauging the feasibility of the project. once risk have been identified they can be allocated to participants and appropriate mechanisms put in place. [pic]
MARKET RISK: Market risk is the risk of adverse deviation of the mark to market value of the trading portfolio, due to market movement, during the period required to liquidate the transactions.
OPERTIONAL RISK: Operational risk is one area of risk that is faced by all organization s.