商業(yè)銀行風險管理-外文文獻翻譯

1、“RISK MANAGEMENT IN COMMERCIAL BANKS”(A CASE STUDY OF PUBLIC AND PRIVATE SECTOR BANKS) - ABSTRACT ONLY1. PREAMBLE:1.1 Risk Management:The future of banking will undoubtedly rest on risk management dynamics. Only those ba

2、nks 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

3、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

4、. 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 intens

5、ified. 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, qua

6、ntifications of risks within each item of the portfolio and reaching a conclusion as to the likely composite credit risk profile of a bank.The corner stone of credit risk management is the establishment of a framework th

7、at defines corporate priorities, loan approval process, credit risk rating system, risk-adjusted pricing system, loan-review mechanism and comprehensive reporting system.1.2 Significance of the study:The fundamental busi

8、ness 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 associa

9、ted therewith as well as the industry as a whole. Generally, Banks in India evaluate a proposal through the traditional tools of project financing, computing maximum permissible limits, assessing management capabilities

10、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

11、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

12、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 The RBI has recently announced that the banks should not pay d

13、ividends at more than 33.33 percent of their net profit. It has further provided that the banks having NPA levels less than 3 percent and having Capital Adequacy Reserve Ratio (CARR) of more than 11 percent for the last

14、two years will only be eligible to declare dividends without the permission from RBI3. This step is for strengthening the balance sheet of all the banks in the country. The banks should provide sufficient provisions from

15、 their profits so as to bring down the net NPAs level to 3 percent of their advances.NPAs are the primary indicators of credit risk. Capital Adequacy Ratio (CAR) is another measure of credit risk. CAR is supposed to act

16、as a buffer against credit loss, which isset at 9 percent under the RBI stipulation4. With a view to moving towards International best practices and to ensure greater transparency, it has been decided to adopt the ’ 90 d

17、ays’ ‘ over due’ norm for identification of NPAs from the year ending March 31, 2004. The New Basel Capital Accord is scheduled to be implemented by the end of 2006. All the banking supervisors may have to join the Accor

18、d. Even the domestic banks in addition to internationally active banks may have to conform to the Accord principles in the coming decades. The RBI as the regulator of the Indian banking industry has shown keen interest i

19、n strengthening the system, and the individual banks have responded in good measure in orienting themselves towards global best practices.1.3 Credit Risk Management(CRM) dynamics:The world over, credit risk has proved to

20、 be the most critical of all risks faced by a banking institution. A study of bank failures in New England found that, of the 62 banks in existence before 1984, which failed from 1989 to 1992, in 58 cases it was observed

21、 that loans and advances were not being repaid in time 5 . This signifies the role of credit risk management and therefore it forms the basis of present research analysis.Researchers and risk management practitioners hav

22、e constantly tried to improve on current techniques and in recent years, enormous strides have been made in the art and science of credit risk measurement and management6. Much of the progress in this field has resulted

23、form the limitations of traditional approaches to credit risk management and with the current Bank for International Settlement’ (BIS) regulatory model. Even in banks which regularly fine-tune credit policies and streaml

24、ine credit processes, it is a real challenge for credit risk managers to correctly identify pockets of risk concentration, quantify extent of risk carried, identify opportunities for diversification and balance the risk-