ISBN - 978-93-81583-46-3

Risk Management Practices of Scheduled Commercial Banks- Perception of Banks Officers

Shalu Rani Assistant Professor Dept. of Business Administration, National Institute of Technology, Kurukshetra shalugupta.1440@gmail.com

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Risk Management Practices of Scheduled Commercial BanksPerception of Banks Officers

RISK MANAGEMENT PRACTICES OF SCHEDULED COMMERCIAL BANKS PERCEPTION OF BANKS OFFICERS

AN ABSTRACT In recent years, financial sector failures and banking sector weaknesses have induced policy makers to device prudent risk management mechanism. Against this backdrop, Basel Capital Adequacy Norms, originally conceived during 1988, brought about broad agreement among G-10 central banks for applying common minimum capital standards to their banking industries. Basel I provided capital charge for credit risk only. It put strong and weak borrower at par and did not provide for difference between regulatory risk and banks actual risk. This led to the evolution of Basel II Capital Accord, which considers estimation of minimum capital requirements for credit, market and operational risk. The study being comprehensive one covers all the three sectors (Public, Private Sector and Foreign Banks) of Indian Scheduled Commercial Banking Industry.

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INTRODUCTION In recent years, financial sector failures and banking sector weaknesses have induced policy makers to device prudent risk management mechanism. Against this backdrop, Basel Capital Adequacy Norms, originally conceived during 1988, brought about broad agreement among G-10 central banks for applying common minimum capital standards to their banking industries. Such standards are aimed at putting all banks on an equal footing with respect to Capital Adequacy so as to promote safety and soundness in banking. Basel I played a significant role in strengthening the financial system. It provided capital charge for credit risk only. It put strong and weak borrower at par and did not provide for difference between regulatory risk and banks actual risk. This led to the evolution of Basel II Capital Accord, which considers estimation of minimum capital requirements for credit, market and operational risk. In Basel II credit risk has been elaborately defined and risk weights have been scientifically determined for strong and weak borrowers. Risk is intrinsic to banking and it is as old as banking itself. Credit risk, market risk and operational risks are the three major risk encountered by every bank. Keeping in view the seriousness of credit risk and need to manage appropriately the same, RBI on the above ground issued guidelines on Credit Risk Management on October 12, 2002. These guidelines focused that the banks should give credit risk prime attention and should put in place a loan policy to be cleared by their boards that covers the methodology for measurement, monitoring and control of credit risk. Basel Committee has proposed Standardized Approaches, Foundation Internal Rating Based Approach and Advanced Internal Rating Based Approach for credit risk capital charge calculations.

TYPES OF RISK AS PER BASEL II NORMS Credit Risk The risk of counter party failure in meeting the payment obligation on the specific date is known as credit risk. Credit risk management is an important challenge for financial institutions and failure on this front may lead to failure of banks. Credit risk arises from non-performance by a borrower. It may arise from either an inability or an unwillingness to perform in the preNational Conference on Emerging Challenges for Sustainable Business 2012 257

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committed contracted manner. This can affect the lender holding the loan contract, as well as other lenders to the creditor. Therefore, the financial condition of the borrower as well as the current value of any underlying collateral is of considerable interest to its bank. The real risk from credit is the deviation of portfolio performance from its expected value. One method is to measure credit risk in a standardized manner based on external credit rating assessment. The other method would allow the banks to use their internal rating system for credit risk. This will be subject to the explicit approval of the banks supervisor. This approach which is termed as internal rating based (IRB) approach has two further options viz. foundation approach and advanced IRB approach. Operational Risk Operational risk is one area of risk that is faced by all organizations. More complex the organization is, more exposed it would be to operational risk. Operational risk arises due to deviations from normal and planned functioning of systems, procedures, technology and human failures of omission and commission. Operational risk may also arise due to inherent faults in systems, procedures and technology, which also impacts revenues of an organization adversely. Basel Committee has defined Operational Risk as follows: The risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. This definition includes legal risk, such as exposure to fines, penalties and private settlements. It does not, however, include strategic or reputational risk. Critically of operational risk has been recognized in Basel II Norms, which requires specific capital allocation accounting for operational risk. The critically of operational risk in the functioning of banks has to be viewed in the context of changes that has taken place in the banking industry. Market Risk Market risk is the risk of asset value change associated with systematic factors. By its nature, this risk can be hedged, but cannot be diversified completely away. In fact, systematic risk can be thought of as undiversifiable risk. All investors assume this type of risk, whenever assets owned or claims issued can change in value as a result of broad economic factors. As such, systematic risk comes in many different forms. For the banking sector, however, two are of
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greatest concern, namely variations in the general level of interest rates and the relative value of currencies. Because of the bank's dependence on these systematic factors, most try to estimate the impact of these particular systematic risks on performance, attempt to hedge against them and thus limit the sensitivity to variations in un diversifiable factors. Accordingly, most will track interest rate risk closely. They measure and manage the firm's vulnerability to interest rate variation, even though they cannot do so perfectly. At the same time, international banks with large currency positions closely monitor their foreign exchange risk and try to manage, as well as limit, their exposure to it.

REVIEW OF LITERATURE A brief review of some of the studies concerning Basel already conducted. Norms is presented to provide insight into the researches. Brief review of some of the studies relating to the field of the study is presented here. Raghavan R.S. (2008) outlined the concept of Basel II Norms for Indian banks. The study explained the three pillar approaches of Basel II Norms, implication of Basel II in the banking sector, challenges for the banks on implementation of Basel II Norms. The study concluded that Basel II principles should be viewed more from the angle of fine tuning ones risk management capabilities through constant mind searching rather than as regulatory guidelines to be compiled with. Gambhire N. Santosh (2007) described the concept of Basel II Norms and the method to calculate credit risk, operational risk and market risk. The study also focused on the challenges and benefits of application of Basel II Norms in Indian banking system. Bagchi (2003) examined the credit risk management in banks, risk identification, risk measurement, risk monitoring, risk control and risk audit as a basic consideration for credit risk management and concluded that proper credit risk architecture, policies and framework of credit risk management, credit rating system, monitoring and control contributes in the success of credit risk management system.

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Nachane (2006) investigated the relationship between changes in risk and capital in Indian banking sector with reference to Public Sector Banks. The study seeks to identify key variables impinging upon the Capital Adequacy of banks and to examine evidence for a shift in bank portfolio towards greater riskiness after the introduction of Capital Adequacy Norms. The study also attempts to draw implications of new Capital Adequacy Framework proposed by the Basel Committee on Banking Supervision (BCBS) for the Indian financial system and evaluate the alternative regulatory arrangement as complements to the Capital Adequacy Ratio. Dash Chandra Pravash (2006) examined the Capital Adequacy Ratio of Indian banks and presented the position of Indian banks related to Capital Adequacy Ratio as per Basel accord. It was concluded that banks have to raise additional capital to meet the Capital Adequacy Ratio as per Basel II requirements. Nitsure (2005) stated that Indian baking sector needs to look at Basel II Norms as opportunities to keep its own house in order. It is a necessary framework to improve the stability and resilience of our rapidly evolving banking industry, currently at a critical phase in its expansion. However, it is unfortunate that the current Basel proposals do not explicitly incorporate the mutual benefits of international diversification for advanced as well as developing countries. Rajeev A.S. (2004) outlined the concept of Basel II-issues and constraints. The study discussed the major risk elements and various approaches in respect of broad risk areas. The study concluded that in order to qualify for use of the standardized or advanced measurement approaches (AMA), a bank must satisfy its supervisors that the minimum qualifying general and specific standards are attained and maintained. R Radhakrishana and Bhatia Ravi (2009) highlighted the implication on adoption of Basel II Norms for Indian banks. The study described the need of Basel II Norms for Indian banks. It concluded that adoption of Basel II Norms will pose challenges for and also offer opportunities to Indian banking sector.

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RESEARCH METHODOLOGY The specific objectives of the study are: To present the staff awareness level about the risk management in Scheduled Commercial Banks of India. To present the staff awareness level about the different categories of risk in Scheduled Commercial Banks of India. To assess the Perception of Scheduled Commercial Banks officer about credit risk management.

DATA SOURCES AND ANALYSIS In order to achieve the specific objectives of the study and test hypothesis, primary data has been collected with the help of structured questionnaire containing questions on various aspects of risk management in different types of banks operating in India. The present study is based on a sample of 100 branch officers working in Scheduled Commercial Banks. The geographical coverage of the sample profile is confined to branches of Scheduled Commercial Banks located in various districts of Haryana, Delhi and Chandigarh. Sector wise coverage of the sample respondents includes 35 respondents from Public Sector Banks, 35 Private Sector Banks and 30 Foreign Banks. The respondents were asked to give their responses on three and five point Likert Scale. Here one means the lowest importance and five means the highest importance given to an item. For analysis purpose, mean score has been computed. To examine the significance difference between Public Sector Banks, Private Sector Banks and Foreign Banks, ANOVA test has been applied. This paper shows the survey results regarding risk management practices of Scheduled Commercial Banks in India. On the basis of the information collected with the help of questionnaire, the following results were noticed that the banks officers of Public Sector Banks, Private Sector Banks and Foreign Banks are aware regarding the risk management, as has been shown by Table 1.

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Table 1 Awareness of Banks Officers regarding Risk Management (Figure in %age) Factors of Risk Management Know about the concept of risk management Banks conduct training program on risk Public Sector 85 78 60 60 Private Sector 82 95 73 73 Foreign 83 95 92 92

Banks employee attend training program Reading material received for risk management

On the basis of above table it is observed that banks officers are aware about the concept of risk management and majority of Private Sector Banks and Foreign Banks i.e. 95 percent conduct training program on risk management while only 78 percent Public Sector Banks conduct the training program for their employees on risk management. Maximum numbers i.e. 92 percent of Foreign Banks employees attend the training program conducted by Foreign Banks followed by Private Sector Banks and Public Sector Banks. For the knowledge regarding risk management 92 percent Foreign Banks officers received reading material while in case of Private Sector Banks 73 percent officers received reading material and in case of Public Sector Banks only 60 percent officers received reading material. For finding the significance difference in awareness level of officers regarding risk management of Public Sector Banks, Private Sector Banks and Foreign Banks, a null hypothesis given has been formulated and tested by applying the ANOVA test. Ho: There is no significant difference in awareness level regarding risk management of officers of Public Sector Banks, Private Sector Banks and Foreign Banks.

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Table 1A ANOVA Table Source of Information Between the Samples Within the Samples Total Table Value Sum of Square 780.16 892.5 1672.66 Degree of 2 12 14 Mean Sum of 390.08 99.16 489.24 F Ratio 3.93

3.89 at 5 percent Level of Significance

As mentioned in Table 1A the calculated value of F is 3.93 and table value of F for (2, 12) degree of freedom is 3.89 at 5 percent level of significance. Since the calculated value is more than the table value of F at 5 percent level of significance, the null hypothesis is rejected and it can be concluded that difference is significant. Table 2 presents the responses of managers of Public Sector Banks, Private Sector Banks and Foreign Banks about awareness regarding management of credit risk in banks. Table 2 Awareness of Bank Officers regarding Credit Risk (Figure in %age) Factors Concept of Credit risk credit risk management Causes of credit risk Best way of managing credit risk Existence of credit risk in loan portfolio Measure of credit risk in loan portfolio Public Sector 64 75 62 95 68 66 Private Sector 75 85 80 100 69 67 Foreign 95 90 93 100 80 77

From the table it is observed that a high percentage of participants of Foreign Banks answer correctly about the knowledge of concept of credit risk and management of credit risk followed by Private Sector Banks and Public Sector Banks. Maximum numbers of officers of Foreign Banks are aware about the causes of credit risk as compare to Private Sector Banks followed by Public Sector Banks. According to them credit risk arises because of quality of assets, asset liability mismatches, HRD issues. 100 percent officers of Foreign Banks and Private Sector Banks consider best way of managing the credit risk is to Identify, measure and manages
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the risk through suitable policies. A high percentage of officers of Foreign Banks followed by Private Sector Banks and Public Sector Banks gave positive responses about the knowledge of existence of credit risk in loan portfolio and its measurement in the terms of the frequency of nonpayment on time by the borrower. For finding the significance difference in awareness level of officers regarding credit risk management of Public Sector Banks, Private Sector Banks and Foreign Banks, a null hypothesis given below has been formulated and tested by applying the ANOVA test. Ho: There is no significant difference in awareness level regarding credit risk management of officers of Public Sector Banks, Private Sector Banks and Foreign Banks. Table 2A ANOVA Table Source of Information Between the Samples Within the Samples Total Table Value Sum of Square 923.44 1889.5 2812.94 Degree of 2 15 17 Mean Sum of 461.72 125.96 587.68 F Ratio 3.66

3.68 at 5 percent Level of Significance

As mentioned in Table 2A the calculated value of F is 3.93 and table value of F for (2, 12) degree of freedom is 3.68 at 5 percent level of significance. Since the calculated value is less than the table value of F at 5 percent level of significance, the null hypothesis is accepted and it can be concluded that difference is not significant. Table 3 presents the responses of managers of Public Sector Banks, Private Sector Banks and Foreign Banks about the continuity of assessing the worth of guarantees and collateral by banks. Table- 3 Bank Assess the Worth of Guarantees and Collateral Banks Public Sector Banks Private Sector Banks Foreign Banks Number of Respondents 35 35 30 Mean Score Value 4.71 4.80 4.00

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From the Table 3, it is observed that the mean score value of managers in Public Sector Banks, Private Sector Banks and Foreign Banks is above 4 which shows that banks assess the worth of Guarantees and Collateral while granting the credit to the customers. For finding the significance difference in assessing the worth of guarantee and collateral of Public Sector Banks, Private Sector Banks and Foreign Banks, a null hypothesis given below has been formulated and tested by applying the ANOVA test. Ho: There is no significant difference in assessing the worth of guarantee and collateral of Public Sector Banks, Private Sector Banks and Foreign Banks. Table 3A ANOVA Table Source of Information Between the Samples Within the Samples Total Table Value Sum of Square 3.33 1880 1883.33 Degree of 2 12 14 Mean Sum of 1.67 156.6 158.34 F - Ratio 1.67/156.6 = 0.010

3.89 at 5percent Level of Significance

As mentioned in Table 3A the calculated value of F is 0. 010 and table value of F for (2, 12) degree of freedom is 3.89 at 5percent level of significance. Since the calculated value is less than the table value of F at 5 percent level of significance, the null hypothesis is accepted and it can be concluded that difference is not significant. Table 4 presents the responses of managers of Public Sector Banks, Private Sector Banks and Foreign Banks about the frequency review of credit risk. Table 4 Frequency Review of Scheduled Commercial Banks if the Credit Risk of a Borrower Change Banks Public Sector Banks Private Sector Banks Foreign Banks Number of Respondents 35 35 30 Mean Score Value 4.8 4.8 4.67

Table 4 defines that the mean score value of managers in Public Sector Banks, Private Sector Banks and in Foreign Banks is above 4. It shows that the managers in banks feel that it is
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important that if the credit risk of a borrower changes than bank should go for more frequency review. For finding the significance difference in frequency review of Public Sector Banks, Private Sector Banks and Foreign Banks, a null hypothesis given below has been formulated and tested by applying the ANOVA test. Ho: There is no significant difference in frequency review of Public Sector Banks, Private Sector Banks and Foreign Banks if the credit risk of a borrower changes. Table 4A ANOVA Table Source of Between the Samples Within the Samples Total Table Value Sum of Square 3.33 1588 1561.33 Degree of Mean Sum of F-Ratio 2 12 14 1.67 132.3 134 1.67/132.3 = 0.012

3.89 at 5percent Level of Significance

As mentioned in Table 4A the calculated value of F is 0.012 and table value of F for (2, 12) degree of freedom is 3.89 at 5percent level of significance. Since the calculated value is less than the table value of F at 5 percent level of significance, the null hypothesis is accepted and it can be concluded that the difference is not significant. Table 5 presents the responses of managers of Public Sector Banks, Private Sector Banks and Foreign Banks about the system of ongoing supervision and follows up of various credit risk bearing portfolios. Table 5 System of Ongoing Supervision and Follow up of various Credit Risk Bearing Portfolio Banks Public Sector Banks Private Sector Banks Foreign Banks Number of Respondents 35 35 30 Mean Score Value 4.91 4.80 5.00

From the Table 5, it can be observed that the banks have a system of ongoing supervision and follow up of various credit risk bearing portfolio as mean score value of managers responses in Public Sector Banks, in Private Sector Banks and in Foreign Banks is
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above 4.5. For finding the significance difference in system of ongoing supervision and follow up of various credit risk bearing portfolio of Public Sector Banks, Private Sector Banks and Foreign Banks, a null hypothesis given below has been formulated and tested by applying the ANOVA test. Ho: There is no significant difference in system of ongoing supervision and follow up of various credit risks bearing portfolio of Public Sector Banks, Private Sector Banks and Foreign Banks. Table 5A ANOVA Table Source of Information Between the Samples Within the Samples Total Table Value Sum of 3.33 2488 2491.33 Degree of Freedom 2 12 14 Mean Sum of 1.67 207.3 209 F-Ratio 1.67/207.3 = 0.008

3.89 at 5percent Level of Significance

As mentioned in Table 5A the calculated value of F is 0.008 and table value of F for (2, 12) degree of freedom is 3.89 at 5percent level of significance. Since the calculated value is less than the table value of F at 5 percent level of significance, the null hypothesis is accepted and it can be concluded that the difference is not significant. The survey results related to operational risk is given in following tables. Table 6 presents the responses of managers of Public Sector Banks, Private Sector Banks and Foreign Banks about the knowledge of concept of management of operational risk. Table 6 Responses of Bank Officers Regarding the Operational Risk (Figure in %age) Factors Concept of management of operational risk Classification of operational risk as defined Banks has started the measurement of Banks have adequate historical data to Public Sector 87 85 85 88 Private Sector 88 78 78 85
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Foreign 86 87 87 80

Risk Management Practices of Scheduled Commercial BanksPerception of Banks Officers

From the above table it is observed that majority (more than 85 percent) of banks officers of Public Sector Banks, Private Sector Banks and Foreign Banks have the knowledge about the concept of operational risk and they have the adequate historical data to manage operational risk. Majority of officers of Public Sector Banks and Foreign Banks considered that banks has started the measurement of operational risks and classification of operational risk as defined by Basel II Norms proves helpful to banks except Private Sector Banks in which the responses of officers was less than 80 percent. For finding the significance difference in awareness level of officers of Public Sector Banks, Private Sector Banks and Foreign Banks regarding operational risk, a null hypothesis has been formulated and tested by using ANOVA Test. The result of ANOVA Test is given in Table 6A. Ho: There is no significant difference in awareness level of officers regarding operational risk of Public Sector Banks, Private Sector Banks and Foreign Bank. Table 6A ANOVA Table Source of Information Between the Samples Within the Samples Total Table Value Sum of Square 33.5 117.5 151 Degree of Mean Sum of F-Ratio 2 12 14 16.75 13.05 29.80 1.28

3.89 at 5percent Level of Significance

As mentioned in Table 6A the calculated value of F is 1.28 and table value of F for (2, 12) degree of freedom is 3.89 at 5percent level of significance. Since the calculated value is less than the table value of F at 5 percent level of significance, the null hypothesis is accepted and it can be concluded that the difference is not significant. Table 8 presents the responses of managers of Public Sector Banks, Private Sector Banks and Foreign Banks about the knowledge of concept of market risk.

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Table 7 Bank Officers Opinion regarding Awareness about Market Risk (Figure in %age) Factors Concept of market risk Management of market risk Bank started the measurement of market It is helpful in minimizing risk Public Sector 70 72 100 100 Private Sector 75 75 100 100 Foreign 83 85 100 100

From the above table it is observed that a very high percentage of officers of Foreign Banks answers correctly that they are aware of the concept of market risk followed by Private Sector Banks and Public Sector Banks. All the managers of Public Sector Banks, Private Sector Banks and Foreign Banks answered correctly as the measurement of market risk has started in banks and measurement of market risk is helpful in minimizing risk. For finding the significance difference in awareness level of officers of Public Sector Banks, Private Sector Banks and Foreign Banks regarding market risk, a null hypothesis has been formulated and tested by using ANOVA Test. The result of ANOVA Test is given in Table 7A. Ho: There is no significant difference in awareness level of officers of Public Sector Banks, Private Sector Banks and Foreign Banks regarding market risk. Table 7A ANOVA Table Source of Between the Samples Within the Samples Total Table Value Sum of Square 88.66 1726 1814.66 Degree of Mean Sum of F-Ratio 2 9 11 44.33 191.77 236.10 0.23

4.26 at 5 percent Level of Significance

As mentioned in Table 7A the calculated value of F is 0.23 and table value of F for (2, 12) degree of freedom is 4.26 at 5percent level of significance. Since the calculated value is less than the table value of F at 5 percent level of significance, the null hypothesis is accepted and it
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can be concluded that the difference in awareness level of officers of Public Sector Banks, Private Sector Banks and Foreign Banks regarding market risk is not significant. CONCLUSION The present study performed a survey on a cross section of 100 banks comprising of all Scheduled Commercial Banks of India. Overall, the responses evidence the growing awareness and importance of risk management in Indian Banking Institutions. Basel II Norms are playing an important role in strengthening the soundness and stability of the international financial system. The results of present study indicate that the awareness about risk management was maximum at officers of Private Sector Banks and Foreign Banks as compare to Public sector Banks. The difference among various levels of staff positions has been statistically significant at 5% level of significance. But no significance difference was observed in awareness about the credit risk, operational risk and market risk in Public Sector Banks, Private Sector Banks and Foreign Banks. The survey has, thus, brought out that irrespective of type of banks, credit risk management framework in India is on the right track and it is fully based on the RBI guidelines issued in this regard. While proper credit administration, prudential limits and loan review are the highly important instruments of credit risk management. Risk rating is the most important instrument. Most banks have their credit approving authority at Head Office Level. Borrower limits and exposure limits are major prudential limits for credit risk management. Risk pricing is a modern tool for pricing credit risk in banks. However, the banks in India needs to use derivatives products as risk hedging tool which is till date is not used in majority of the banks. Main limitation of the study is that only the quantitative aspects of performance have been examined, qualitative aspects such as motivation of employees, customer satisfaction, image of the bank have not been considered which may play definite role in the performance of a bank.
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REFERENCES Dash Parvesh Chander (2006), Capital Adequacy Ratio-Issues in India, Banking, June, pp. 5254. Nitsure Rege Pura (2005), Basel II Norms-Emerging Market Perspective with Indian Focus, Economic and Political Weekly, March, pp. 1162-1166. R.S. Rajeev (2004), Basel II-Issues and Constraints, IBA Bulletin, June, pp. 1-6. Sarma Mandira and Nikaido Yuko (2007), Capital Adequacy Regime in India, Indian Council for Research on International Economic Relations, Working Paper No. 196. R Radhakrishanan and Bhatia Ravi (2009), Adoption of Basal II Norms: Are Indian Banks Ready?Indian Institute of Management, Calcutta, www.indianmba.com / occasional _papers / op 206/op206.html Sen Sunanda and Ghosh Soumya Kanti (2005), Basel Norms, Indian Banking Sector and Impact on Credit to SMEs and the Poor, Economic and Political Weekly, March, pp. 11671171. Raghavan R.S. (2008), Basel II, the Way Forward for Banks, the Chartered Accountant, April, pp. 1767-1774. Gambhir N. Santosh (2007), Basel II Are Indian Banks Going to Gain, Jamanala Bajaj Institute of Management Studies, Mumbai. Nachane, Dilip, Ghosh, Saibal and Ray, Partha (2006): Basel II and bank lending behavior: Some likely implications for monetary policy in India. Published in: Economic and Political Weekly, Vol. 41, No. 11 (2006): pp. 1053-1058. Bagchi S.K. (2003), Credit Risk Management-A Panacea or Conundrum? SBI Monthly Review, Vol. 42, No. 10, pp 497-504. Ratna Bharat (2008), NBFCs Capital Adequacy Norms Tightened, The India Street available at www.bis.org. Sarma Mandira and Nikaido Yuko (2007), Capital Adequacy Regime in India, Indian Council for Research on International Economic Relations, Working Paper No. 196, www.icrier.org/pdf/Working_Paper_196.pdf Bandyopadhyay, Arindam (2006), Predicting Probability of Default of Indian Corporate Bonds: Logistic and Z score Model Approaches, The Journal of Risk Finance, Vol. 7, No-3, pp. 255272. Ghosh, Saibal and Das, Abhiman (2005), Market Discipline, Capital Adequacy and Bank Behaviour: Theory and Indian Evidence, Economic and Political Weekly, Vol. 40, No. 12 pp. 1198-1209. Nitsure Rege Pura (2005), Basel II Norms-Emerging Market Perspective with Indian Focus, Economic and Political Weekly, pp. 1162-1166. Rajeev R.S (2004), Basel II-Issues and Constraints, IBA Bulletin, pp. 1-6. Ganti Subrahmanyam (2004), Capital Adequacy Norms-Aggravate Banks Regulatory Burden, The Journal of the Indian Institute of Bankers, pp. 182-184.
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Dash Parvesh Chander (2006), Capital Adequacy Ratio-Issues in India, Banking, pp. 52-54. Ferguson Roger W. (2001), Credit Risk Management- Models and Judgments, PNB Monthly Review, Vol.-23, No 10, pp. 23-31. Basel Committee on Banking Supervision (1996), Amendments to the Capital Accord to Incorporate Market Risk, available at www.bis.org. Reserve Bank of India (2006), Reserve Bank of India Annual Report 2005-06, www.rbi.org.in.

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