Analyzing Risk Management and Non-Performing Assets in Banks

Abstract

All financial institutions face risks to some degree. When talking about risk it must be analysed which conditions carries more risk than another. Thus, a bank must evaluate both the return and the risk implanted in the portfolio. Banks must measure the anticipated profit and assess the prudence of the various risks tallied to be sure that the result attains the stated goal of maximizing shareholder value. This study was conducted in HDFC bank in India. The study has used both primary and secondary data. The aim of the chapter was to inspect the different practices followed by the bank to different types of risks which a bank faces when credit is given and how these practices has assisted the bank to drop the consequence of the risk on the effectiveness and operations. The chapter also reveals the contemporary developments in the Non-Performing Asset levels of the bank and how bank has been successful in reducing the pace of NPAs to curtail the load of securitization.