外文翻譯----商業(yè)銀行風(fēng)險(xiǎn)管理(已修改)
2025-06-01 11:42 本頁(yè)面
【正文】 “RISK MANAGEMENT IN COMMERCIAL BANKS” (A CASE STUDY OF PUBLIC AND PRIVATE SECTOR BANKS) ABSTRACT ONLY 1. PREAMBLE: Risk Management: 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 ponent of prehensive risk management essential for longterm 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. Competition from within and outside the country has intensified. This has resulted in multiplicity of risks both in number and volume resulting in volatile markets. A precursor to successful management of credit risk is a clear understanding about risks involved in lending, quantifications of risks within each item of the portfolio and reaching a conclusion as to the likely posite credit risk profile of a bank. The corner stone of credit risk management is the establishment of a framework that defines corporate priorities, loan approval process, credit risk rating system, riskadjusted pricing system, loanreview mechanism and prehensive reporting system. Significance of the study: The fundamental business of lending has brought trouble to individual banks and entire banking system. It is, therefore, imperative that the banks are adequate systems for credit assessment of individual projects and evaluating risk associated therewith as well as the industry as a whole. Generally, Banks in India evaluate a proposal through the traditional tools of project financing, puting maximum permissible limits, assessing management capabilities and prescribing a ceiling for an industry exposure. As banks move in to a new high powered world of financial operations and trading, with new risks, the need is felt for more sophisticated and versatile instruments for risk assessment, monitoring and controlling risk exposures. It is, therefore, time that banks managements equip themselves fully to grapple with the demands of creating tools and systems capable of assessing, monitoring and controlling risk exposures in a more scientific manner. Credit Risk, that is, default by the borrower to repay lent money, remains the most important risk to manage till date. The predominance of credit risk is even reflected in the position of economic capital, which banks are required to keep a side for protection against various risks. According to one estimate, Credit Risk takes about 70% and 30% remaining is shared between the other two primary risks, namely Market risk (change in the market price and operational risk ., failure of internal controls, etc.). Quality borrowers (TierI borrowers) were able to access the capital market directly without going through the debt route. Hence, the credit route is now more open to lesser mortals (TierII borrowers).With margin levels going down, banks are unable to absorb the level of loan losses. There has been very little effort to develop a method where risks could be identified and measured. Most of the banks have developed internal rating systems for their borrowers, but there hasbeen very little study to pare such ratings with the final asset classification and also to finetune the rating system. Also risks peculiar to each industry are not identified and evaluated openly. Data collection is regular driven. Data on industrywise, regionwise lending, industrywise rehabilitated loan, can provide an insight into the future course to be adopted. Better and effective strategic credit risk management process is a better way to Manage portfolio credit risk. The process provides a framework to ensure consistency between strategy and implementation that reduces potential volatility in earnings and maximize shareholders wealth. Beyond and over riding the specifics of risk modeling issues, the challenge is moving towards improved credit risk management lies in addressing banks’ readiness and openness to accept change to a more transparent system, to rapidly metamorphosing markets, to more effective and efficient ways of operating and to meet market requirements and increased answerability to stake holders. There is a need for Strategic approach to Credit Risk Management (CRM) in Indian Commercial Banks, particularly in view of。 (1) Higher NPAs level in parison with global benchmark (2) RBI’ s stipulation about dividend distribution by the banks (3) Revised NPAs level and CAR norms (4) New Basel Capital Accord (Basel –II) revolution According to the study conducted by ICRA Limited, the gross NPAs as a proportion of total advances for Indian Banks was percent for financi
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