SYNOPSIS

ON

“STUDY OF RISK MANAGEMENT IN SELECTED INDIAN BANKS”

A report submitted to R.T.M Nagpur University in partial fulfillment of course in MASTER
OF BUSINESS ADMINISTRATION (M.B.A) specialization in FINANCIAL
MANAGEMENT

Submitted By
Sanket Satishrao Khedkar

ENROLLMENT NO:

Guided by

Dr. S. H. Randhir

DEPARTMENT OF MANAGEMENT STUDIES

K. D. K. COLLEGE OF ENGINEERING, NAGPUR.

(2019-2021)
 INDEX
Sr. Particular Page.
No No.
.
1 Index
2 Introduction
3 Company Profile
4 Research Methodology
 Data Collection
 Objective of Study
 Sample Design
 Sample Size
 Hypothesis
 Scope of study
 Limitations
5 Data Analysis & Interpretation
6 Finding
7 Conclusion
8 Suggestion
9 Bibliography
Introduction

For the purpose of these guidelines financial risks in banking organization is possibility that an
outcome of an action or event could bring up adverse impact. Such outcome could either result in
direct loss of earning capital. Such constraint poses a risk as these could hinder a bank's ability to
conduct its ongoing business or to take benefit of opportunity to enhance its business.

Risk are usually defined by the adverse impact on probability on several distinct source of
uncertainty. While the types & degree of risks an organization may be exposed to depend upon a
number of factors such as size, complexity business activity, it is believed that generally the bank face
liquidity, credit. Before overarching these risks categories, given below are some basic about risk
management & some guidelines principles to manage the risks in banking organization.

In view of growing complexity of banks business & dynamic operating environment,

management has become very significant, especially in financial sector. Risks at the apex level may
be visualized as the probability of a bank's financial health impaired due to one or more contingent
factor. While the parameter indicating the bank's health vary from NIM to market value of equity the
factor which can cause the important are also numerous. For instances, these could be default in
repayment of loan by borrowers, changes in value of asset or disruption of operation due to reason like
technological failure. While the first two factor as classified as credit risk & market risks, generally
bank's have all risks excluding the credit & market risks as operation risk as operation risks.

Risk management in Indian banks

Risk management in Indian banks is a relatively newer practice, but has already shown to
increase efficiency in governing of these banks as such procedures tend to increase the corporate
governance of a financial institution. In times of volatility and fluctuations in the market, financial
institutions need to prove their mettle by withstanding the market variations and achieve sustainability
in terms of growth and well as have a stable share value. Hence, an essential component of risk
management framework would be to mitigate all the risks and rewards of the products and service
offered by the bank. Thus the need for an efficient risk management framework is paramount in order
to factor in internal and external risks.

The financial sector in various economies like that of India are undergoing a monumental
change factoring into account world events such as the ongoing Banking Crisis across the globe.
The 2007–present recession in the United States has highlighted the need for banks to incorporate the
concept of Risk Management into their regular procedures. The various aspects of increasing global
 competition to Indian Banks by Foreign banks, increasing Deregulation, introduction of innovative
products, and financial instruments as well as innovation in delivery channels have highlighted the
need for Indian Banks to be prepared in terms of risk management.

Indian Banks have been making great advancements in terms of technology, quality, as well as
stability such that they have started to expand and diversify at a rapid rate. However, such expansion
brings these banks into the context of risk especially at the onset of increasing Globalization and
Liberalization. In banks and other financial institutions, risk plays a major part in the earnings of a
bank. The higher the risk, the higher the return, hence, it is essential to maintain a parity between risk
and return. Hence, management of Financial risk incorporating a set systematic and professional
methods especially those defined by the Basal becomes an essential requirement of banks. The more
risk averse a bank is, the safer is their Capital base.

Company Profile
STATE BANK OF INDIA

The State Bank of India (SBI) is an Indian multinational, public sector banking and financial

services company. It is a government-owned corporation headquartered in Mumbai, Maharashtra. The
company is ranked 216th on the Fortune Global 500 list of the world's biggest corporations as of 2017. It is
the largest bank in India with a 23% market share in assets, besides a share of one-fourth of the total loan
and deposits market.

BANK OF BARODA

Bank of Baroda (BoB) is an Indian multinational, public sector banking and financial services company. It is

owned by Government of India and headquartered in Vadodara, Gujarat. It has a corporate
office in Mumbai, Maharashtra.

Based on 2017 data, it is ranked 1145 on Forbes Global 2000 list. BoB has total assets in excess
of ₹ 3.58 trillion (making it India’s 2nd biggest bank by assets), a network of 5538 branches in India and
abroad, and 10441 ATMs as of July, 2017. The government of India announced the merger of Bank of
Baroda, Vijaya Bank and Dena Bank on September 17, 2018 to create the country's third largest lender.

ICICI BANK

ICICI Bank Limited (Industrial Credit and Investment Corporation of India) is

an Indian multinational banking and financial services company headquartered
in Mumbai, Maharashtra with its registered office in Vadodara, Gujarat. As of 2018, ICICI Bank is the
second largest bank in India in terms of assets and market capitalisation. It offers a wide range of banking
products and financial services for corporate and retail customers through a variety of delivery channels and
specialised subsidiaries in the areas of investment banking, life, non-life insurance, venture capital and asset
management.

AXIS BANK

Axis Bank is the third largest of the private-sector banks in India offering a comprehensive suite of financial
products. The bank has its head office in Mumbai, Maharashtra. It has 3,703 branches, 13,814 ATMs, and
nine international offices. The bank employs over 55,000 people and had a market capitalization of ₹1.31
trillion (US$18 billion) (as on March 31, 2018). It sells financial services to large and mid-size corporates,
SME, and retail businesses.

RESEARCH METHODOLOGY
The methodology that was adopted for the study includes both primary source data as well as the secondary
source of data. The methodology of the study can be explained as follows :

DATA COLLECTION

Data collection refers to a purpose gathering of information relevant to the subject matter under study and
methods depend mainly on nature, purpose and scope of the enquiry to be undertaken on the available
resources and time.

Data collection is one of the methods of research. There are mainly two methods of the data
collection.

SECONDARY DATA :

Secondary data means data that are already available i.e. they refer to the data which have been already been
collected and analyzed by someone else. When the researcher utilizes secondary data, then he has to look
into various sources from where he can obtain them.

1. Internet
2. Company manuals and booklets
3. Books etc.
The source of information is generally classified as primary and secondary .
According to payline V. young The source of information can be classified into documentary sources
and field sources.

OBJECTIVES

 To know the Information about Risk Management in Indian Banks.

 To assess Interest Rate Risk in selected Indian banks.

 To discuss the importance of interest rate risk in Indian Banks.

 To assess Liquidity Risk in selected Indian Banks.

 To compare the level of Interest rate risk & Liquidity rate risk using Gap Analysis in selected public

and private sector banks.

SCOPE OF THE STUDY:

  The scope of study is limited due to time and money constraints.

Hypothesis
H-0 Private banks are more exposed in risk as compared to nationalized bank.

H-1 ICICI bank is better position in terms of liquidity management because they can able to maintain
minimum gap between Rate Sensitive Asset & Rate Sensitive Liability.

Limitation

1. The study is limited due to time and money constraint.

2. The study is limited due to the limited sample size.

3. Tools used in data collection are not always be accurate creates error most of the time.

4. The study is also limited because of confidential issues

Bibliography / References
 Dr. Shashi Srivastava and Dr. Divya Srivastava, Interest Rate Risk Management: A
Comparative Study of State Bank of India and ICICI Bank, International Journal of
Management and Social Sciences Research (IJMSSR), Volume 4, no. 7, July 2015.
 Mr. Guru Santhosh and Prof. V. N. Prakash Sharma, Interest Rate Risk Management: A
Comparative study of State Bank of India and HDFC bank, 05, Issue No 1, January 2016.
 Padmalatha Suresh and Justin Paul, management of banking and financial services (India,
Pearson, 2015).

WEBSITE:
 www.riskmanegementindia.com
 www.interestrateriskindia.com
 www.luquidityriskindia.com
 www.investopedia.com
 www.wekipidea.com