Risk Monitoring and Control System in Indian Commercial Banks: An Empirical Investigation

Abstract

Banking industry has witnessed dramatic changes in the past two decades. Banks suddenly faced losses due to unfavorable credit exposures, fluctuations in interest rates, volatile market situations and balance sheet risk. In order to cope with this, banks embarked on to upgrade their risk management and control system. Risk monitoring is used to ensure that risk management practices of bank are in line with the objectives of the bank and proper risk monitoring helps bank management to discover mistake at early stage. This paper is an attempt to identify the factors that contribute to Risk monitoring and control system in banks and to compare Risk monitoring and control system followed in public sector and private sector banks in India, the empirical study has been conducted and views of employees of various banks have been tested using statistical tools.