Awareness of Risk Management Practices System in Indian Commercial Banks-A Perception based Analysis

Abstract

A sound and reliable banking system is a significant feed for accomplishing economic growth all the way through the mobilization of monetary resources, placing them to dynamic use and transforming various risks. With progressive deregulation and liberalization of the Indian financial sector, banks are increasingly exposed to various kinds of risks such as credit risk, market risk, operational risk, liquidity risk, foreign exchange risk, interest rate risk, etc. which may threaten a bank's survival and success. Risk is a condition that raises the chance of losses/gains and the uncertain potential events which could manipulate the success of financial institutions. A well established risk management practices can assist banks to reduce their exposure to risks. Only those banks that have efficient risk management system will survive in the market in the longrun. For this reason, efficient risk management is absolutely required. The purpose of this research is to examine the degree of awareness in Indian banks about risk management practices among the bank employees at the grassroot level. The secondary objective is to compare the awareness about the risk management practices between the public, private and foreign banks of India.