List of content. Chapter 1: Introduction 1. Chapter 2: Literature review 7

Transcription

1 Title List of content Page Chapter 1: Introduction 1 1. Introduction 2 2. Purpose of the research 3 3. Objectives of the research 4. Questions and Hypotheses of the research 4 5. Methodology of study 4 6. Scope and limitation of study 5 7. Observations and results 6 Chapter 2: Literature review Introduction Risk is the variability in the actual returns in relation to the estimated returns Quantifying Capital For Operational Risk Basel Acceptance Criteria Method for capturing Risk Factors In Selecting An Approach Overall Description 15 Chapter 3: Theoretical background 19 Section 3.1: Cooperative Banking A brief historical description of cooperative banks in India Urban Co-operative Banks Rural Co-operative Credit Institutions NABARD and the Co-operative Sector Resources of NABARD Credit extended by NABARD 29 i

2 Section 3.2: Introduction to Risk Management in banks An introduction to risk management in banking system Objective of risk management Some definitions and declaration of objective of risk management Reviewing of risk management methods Risk identification Risk assessment methods Risk management Risk management process Risk Management Structure The Risk Management Cycle RBI guidelines in Risk management systems in banks 48 Section 3.3: Basel Committee Accords (BCA) Introduction History of Basel Committee Objectives for Basel II Key Elements of Basel II Basel II Implementation in India: A Seven-Step Approach Conclusion 66 Section 3.4: Operational Risk Management Introduction Background Operational Risk deification Dimensions of operational risk Quantifying Capital For Operational Risk RBI Guidelines Sound Practices of Basel committee Operational Risk Measurement 80 ii

3 3.4.9 Measurement Methodology Risk Mitigation Factors In Selecting An Approach Operational Risk Management process 97 Section 3.5: Market Risk Management Introduction Specification of market risk factors Market-type risks Regulation market risk in bank THE INTERNAL MODELS APPROACH Liquidity Risk 115 Section 3.6: Credit Risk Management Introduction Objective of credit risk management Difficulties face to credit risk management Managing of credit risk Credit Risk Environment Credit Risk Strategy Credit policy Instruments of Credit Risk Management RBI GUIDELINES ON CREDIT RISK RATING LINKAGES OF CREDIT RISK RATING Testing risk rating model Risk Pricing Portfolio Management Loan Review Mechanism (LRM) 135 iii

4 Credit risk in off-balance sheet Exposure Role of Analytical Techniques and MIS in Credit Risk Management Training 138 Section 3.7: Interest rate risk management Introduction The most common target accounts for managing interest rate risk Components of interest rate risk Interest Rate Risk (IIR) management Sources of Interest Rate Risk Type of Interest Rate Risk Supervisory guidelines Interest rate risk measurement techniques Adequate risk management policies and procedures Internal controls Information for supervisory authorities Capital adequacy Disclosure of interest rate risk Supervisory treatment of interest rate risk in the banking book Conclusion 170 Section 3.8: Asset liability management (ALM) Introduction Objectives of asset and liabilities Help of ALM Previous Research General ALM approaches at the country level Proactive ALM at Banks Asset Liability Management in Indian banking system ALM Organization ALM process 180 iv

5 3.8.9 A general analytical framework for ALM Integrated ALM Approach Advantages of the integrated ALM approach Reporting Requirements 183 Section 3.9: None performing assets (NPA) Introduction Indian economy and NPAs Global Developments and NPAs Meaning of NPAs Asset Classification A huge levels of NPAs exist in the Indian banking system (IBS Credit Risk and NPAs The importance of credit rating in assessing the risk of default for lenders Usage of financial statements in assessing the risk of default for lenders Capital Adequacy Ratio (CAR) of RBI and Basle committee on banking supervision (BCBS) Excess of liquidity High cost of funds due to NPAs Need for effective asset management policies Asset management 196 Section 3.10: Foreign Exchange Management (FOREX): Foreign Exchange (Forex) Risk Forex Risk Management Measures Capital for Market Risk 202 Section 3.11: New technology and its risk in banks Introduction What is Technology Risk and it s importance? 206 v

6 Technology-Related Risk Management Process Measure and Monitor Performance Internet Banking Risks Risk Management Tools 218 Section 3.12: Value at Risk (VaR) Introduction What is VaR? VaR parameters Use of VaR in Risk Measures Determining VaR Risk Metrics 237 Chapter 4: Methodology of study Questionnaire Structure Population and Sampling method Data Analysis Scope and limitation of study 243 Chapter 5: Data analysis 244 Chapter 6: Result and Conclusion and recommendations Observations and results Conclusions and recommendations 252 Chapter 7: Bibliography 253 Appendix I: Questionnaire of study vi

7 List of tables Title Page Table 3.1: The cooperative credit institutions 23 Table 3.2: Select Indicators of Non-Scheduled Urban Co-operative Banks ñ Centrewise (As at end-march 2006) 26 Table 3.3: Net Accretion in the Resources of NABARD 28 Table 5.1: Status of applying risk programme in cooperative banks 245 Table 5.2 Weight of risk in cooperative bank 246 Table 5.3: Percentage of risk kind in cooperative banks 247 Table 5.4: One-Sample Test for all kind of risk 248 Table 5.5 One-Sample Test for differences by the weight of risk factors between cooperative banks in Pune 248 Table 5.6: Paired sample Test for the banks all kind of risk 249 Table 5.7: One Sample Test for differences between cooperative banks by all kind of risk 249 vii