Risk management in Indian banks: A comparative study of private and public sector banks

Abstract

Risk management plays a crucial role in maintaining the stability and sustainability of banking institutions. This paper aims to investigate and compare the risk management practices adopted by public and private sector banks in India. The study evaluates the regulatory framework, operational risk control mechanisms, credit risk assessment, market risk mitigation, and capital adequacy strategies. It draws insights from secondary data sources including Reserve Bank of India (RBI) reports, annual bank reports, and existing literature. The findings suggest that while both sectors adhere to regulatory norms, private sector banks exhibit more agile and technology-driven approaches to risk management. Conversely, public sector banks rely more on traditional, compliance-based frameworks. The paper concludes with suggestions for harmonizing risk management practices across the banking industry to enhance systemic stability.