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OBJECTIVES
The core objectives of the study are:
To study the various types of risk available in banks. To study the Techniques used to sort out these various risk. Analysis of Credit Risk Management in brief. Comparison between Non performing assets and Inflation
rate in Public and Private Sectors Banks.
Credit Risk Market Risk (Interest Rate Risk, Liquidity Risk) Operational Risk Systematic Risk Liquidity Risk
Counterparty Risk
Legal Risk
BASEL II
Basel II uses a three pillars concept(1) minimum capital requirements, (2) supervisory review and (3) market discipline-to promote greater stability in financial system. the
Setting policies and guidelines, Ensuring that market risk management processes satisfy
Banks policy,
Reviewing and approving market risk limits, Appointment of qualified and competent staff.
pricing for additional risk, increased holdings of capital to compensate for the
additional risk,
RESEARCH METHODOLOGY
Types of Research:
Exploratory Research & Analytical Research
Analysis:
The ratio of non-performing assets (NPA) to total loans (TL) on private and public sector banks
Data Collection:
Secondary Data
Sample size :
A total of 22 Scheduled Commercial Banks that were listed in the Bombay Stock Exchange (BSE) were chosen for this study based on the availability of the data for the entire 3 year period from 2009 to 2011
Hypothesis: Ho= There is No significance linear relationship between NPA and Inflation rate. H1= There is significance linear relationship between NPA and Inflation rate.
REGRESSION ANALYSIS
Comparison between Non-performing asset to net advances and Inflation rate in Private Sector Banks:
Comparison between Non-performing asset to net advances and Inflation rate in Public Sector Banks:
FINDINGS
(1) In 2009 and 2010, the percentage of NPA to net advances was
higher in private sector banks , but in 2010, it was higher in public sector banks.
CONCLUSION
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