(A CASE STUDY OF PUBLIC AND PRIVATE SECTOR BANKS) - ABSTRACT ONLY Prof. Rekha Arunkumar Faculty (Finance), MBA Programme
ABSTRACT: “Banks are in the business of managing risk, not avoiding it……… ……… ……..” 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. Credit risk is the oldest and biggest risk that bank, by virtue of its very nature of business, inherits. This has however, acquired a greater significance in the recent past for various reasons. Foremost among them is the wind of economic liberalization that is blowing across the globe. India is no exception to this swing towards market driven economy. Better credit portfolio diversification enhances the prospects of the reduced concentration credit risk as empirically evidenced by direct relationship between concentration credit risk profile and NPAs of public sector banks. “……… bank’s success lies in its ability to assume and ……… ……A aggregate risk within tolerable and manageable limits”.
First Author; Prof. Rekha Arunkumar Ph.D., from University of Mysore (awaiting result by September ’ 05), PGDCA, M.Com., B.B.M., Faculty in Finance (10 years of experience), MBA Programme, Bapuji Institute of Engineering & Technology (affiliated to Visveswaraya Technical University) Davangere – 4. Karnataka
Second Author; Dr. G. Kotreshwar Ph.D., M.Com., ICWAI., Professor of Commerce (25 years of experience) University
Bibliography: Books: Bidani S.N., (2002), “Managing Non-Performing Assets in Banks”, Vision Books publishers, Ref:#8-02-06-12, pp.71-74. Eddie Cade, (1997), “Managing Banking Risks”, First Edition, Woodhead Publishing Ltd., In association with The Chartered Institute of Bankers, England, pp. 104 – 144. James T. Gleason, (2001), “ Risk – The New Management Imperative in Finance”, Jaico Publishing house, pp. 13-19. & 113-121. Johan E.Mckinley & John. R. Barrickman, (1994), “Strategic Credit Risk Management”, Robert Morris Association, Philadelphia, pp. 1-12, 20-27, 36-42, 62-68. Joseph F. Sinkey, Jr., (1998), “Commercial Bank Financial Management – In the Financial Services Industry”, Fifth Edition, Prentice-Hall International Inc., New Jersey. pp. 22-35, /213-220 and 404-408. Timolthy W.Koch, (1998), “ Bank Management”, Library of Congress Cataloging-inPublication Data, pp. 431-440. Timothy W. Koch, (1998), “Bank Management - Overview of credit policy and loan characterstics”, Third Edition, The Dryden Press, Harcourt Brace College Publishers, pp. 431-440 and 629-630. Articles : Agarwal P. and Srikanth V (2002), “A question of Reliability”, Economic Times, July 24, 2002. Bank for International Settlement (BIS), January, 2000. Banking Bureau, (2002), “RBI Reports finds increase in NPAs of Commercial Banks”, The Financial Express, November 16, 2000. Banvali O.P. (2001), “ Life line of Banking New RBI formula for NPA recovery”, IBA Bulletin, January 2001, pp. 23-26. Basel Committee on Banking Supervision, (2003), “Third Quantitative Impact Survey – An Overview”, IBA Bulletin, February 2003, pp. 6 ICICI Bank Ltd., Report (2003), “Banking scene in India”, IBA Bulletin, January, 2003. pp.36 21 ICRA Limited “Global Benchmarking”, IBA Bulletin, January 2004, Vol XXVI. No.1, pp. 26. Murthy E.N., (2002), “Managing Credit Risk”, ICFAI Reader, Vol.2, February 2002, pp. 3 Murthy G.R.K., (2001), “Credit-Risk-Management in a market driven economy; The Acid Test for banks”, IBA Bulletin, March 2001. pp.105-123. Narasimham P.V., (1998), “Risk Management - Towards Sound & Strong Banking”, presented at BECON’ 98 conference, pp. 54-61 Narasimhan N., (2003), “Banking sledge hammers for NPA Files”, Professional Bankers, March 2003, pp. 25-27. Pricewaterhouse Coopers, (2004), “Management of Non-Performing Assets by Indian Banks”, IBA Bulletin, January 2004, Vol XXVI. No. 1., pp, 61-97 Rajeev A.S. (2004), “Basel II – Issues and Constraints”, IBA Bulletin, June 2004, pp. 11 Murthy E.N., (2002), “Managing Credit Risk”, ICFAI Reader, Vol.2, February 2002, pp. 3 Murthy G.R.K., (2001), “Credit-Risk-Management in a market driven economy; The Acid Test for banks”, IBA Bulletin, March 2001. pp.105-123. www.BaselAccord.htm, (2002), “Risk Management systems in Banks”, pp.1-15. www.PortfolioCreditRiskEvaluation-ANewPerspective.htm, (2001), “Portfolio Credit Risk Evaluation – A new perspective”, The Hindu, May 27. www.rbi.org.in, (2001), “Move towards RBS of banks – discussion paper”, (2001), RBI, DBS.CO/RBS/58/36.01.002/2001-02., 13th August 2001.pp. 1-10 First Author; Prof. Rekha Arunkumar Ph.D., from University of Mysore (awaiting result by September ’ 05), PGDCA, M.Com., B.B.M., Faculty in Finance (10 years of experience), MBA Programme, Bapuji Institute of Engineering & Technology (affiliated to Visveswaraya Technical University) Davangere – 4. Karnataka Second Author; Dr. G. Kotreshwar Ph.D., M.Com., ICWAI., Professor of Commerce (25 years of experience) University of Mysore, Manasagangotri Mysore – 6. Submitted to Review Committee Ninth Capital Market Conference Indian Institute of Capital Market (December 19-20, 2005) Mumbai. 22