Risk goes hand in hand which we can not separate from banking. The profit of a bank depends on the risk management of the bank as the better risk management gives better financial result and on the other hand the bad risk management puts the bank on risk and some time that may become the reason of having huge loss to the bank. The recent crisis of Yes Bank, PMC Bank etc. have shown the severity of risk management.
If we define Risk in a simple language we can say that the Risk is the probability of happening some thing bad which is not expected or desired. It means that the risk implies future uncertainty about deviation from expected outcome. Bank being a financial intermediary is exposed to various risks, primarily Credit risk, Market risk, Liquidity risk, Operational risk, Technology risk, compliance risk, Legal risk and Reputational risk. Every bank is committed to managing all the material risks and participating in opportunities as part of the strategic approach of risk calibrated growth in core operating profit with a less scope of provisions.
Major Risks which the Bank Faces:
Risks are part and parcel of the banking business which every bank faces and mitigates them with its laid down guidelines and policies in the broad framework of Reserve Bank of India. The major risks which the bank faces are:
Operational Risk: The risk which arises due to inadequate or failed internal processes, people and systems or from any external events. Major activities that comes under operational risk are Internal fraud, External fraud, Employment practices and workplace safety, Clients, Products and Processes, Damage to Physical assets of the bank, Execution and delivery of services etc.
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Esta historia es de la edición August 2024 de BANKING FINANCE.
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Are Bank Cards Going to be a Thing of the Past..??
The Reserve Bank of India's (RBI) push to enable Unified Payments Interface (UPI)-backed cash withdrawals from ATMs is likely to cause a severe dent in the usage of debit cards, according to payment industry executives.
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The mutual fund industry has experienced tremendous growth, expanding over sixfold in recent years to reach a valuation of ₹68 lakh crores.
Fetching Fugitive Offenders through Fugitive Economic Offenders Ordinance
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Empowering Innovation with Design Thinking
The primary challenge for companies lies in sustaining innovation to preserve or improve their position within their individual markets. Innovation cannot be treated as a single instance initiative. It must become ingrained in the company's culture.
RBI CIRCULAR
The Prudential Framework for Resolution of Stressed Assets dated June 7, 2019, read with the Framework for Compromise Settlements and Technical Write-offs dated June 08, 2023, provides a principle-based resolution framework to the regulated entities (REs) for addressing any stress in borrower accounts.
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Systematic Investment Plans (SIPs) have emerged as one of the most popular and effective investment vehicles for retail investors in India. With the increasing awareness of financial planning and the importance of disciplined investing, SIPs have become a cornerstone of wealth creation for individuals across diverse income groups.
Social Media for Mutual Fund Distributors: Strategies for Online Lead Generation
Social media has transformed the way businesses connect with their audience, and mutual fund distributors are no exception. With millions of Indians spending significant time on platforms like LinkedIn, Instagram, and Facebook, these channels offer a powerful opportunity for distributors to engage with potential clients, build trust, and generate leads.
Legal News
The Maharashtra Authority for Advance Rulings (MAAR) has ruled that the Reserve Bank of India (RBI) does not need to pay Goods and Services Tax (GST) on fines, penalties, and late fees collected from regulated entities. The ruling was issued after the RBI sought clarity on whether such fines, collected for contraventions or violations of laws, are taxable under GST.
'Deep Fake' - an emerging risk for Banking & Financial Sector
Deepfake KYC fraud is a growing concern in India, where fraudsters leverage AI-generated deepfake videos and images to bypass Know-Your-Customer (KYC) verification processes. This has significant implications for financial institutions, fintech companies, and other organizations that rely on KYC to verify the identity of their customers.
RBI CIRCULAR
Operational framework for reclassification of Foreign Portfolio Investment to Foreign Direct Investment (FDI) - November 11, 2024
