Risk Mitigation Practices in Banking

Abstract

The prime activity of a bank is to lend money and earn profits in the form of interest but by doing so the money is exposed to the risk of default where the borrower is not able to pay the money back in specified period or becomes insolvent. The research study carried out at HDFC Bank under the topic “Risk Mitigation practices in banking- a study of HDFC bank” to fulfill the said motive turned out to be useful in understanding the various policies and practices used by the bank to manage the different types of risk that arise in banking. The study is grounded on the both primary as well as secondary data. The purpose of the study was to examine the different practices followed by the bank to such type of risks and how these practices has helped the bank to decrease the effect of the risk on the profitability and operations . The study also coves the recent trends in the Non-Performing Asset levels of the bank and how bank has been successful in decreasing the pace of NPAs to minimize the burden of securitization.