Risk Management has assumed great significance in banking scenario
- Risk can be defined as potential loss from a banking transaction( in the form of a loan, or investment in securities or any other kind of transaction undertaken by the bank for itself or for customers), which a bank can suffer due to variety of reasons
- The basic objective of risk management is to stake holdersu2019 value by maximizing the profit and optimizing the capital funds for ensuring long term solvency of the banking organization
- As a part of payment system reforms, RBI had initiated several measures to reduce risks especially settlement and systemic risk
