Project on Risk Management

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A Summer Training Project Report on

“RISK MANAGEMENT BY INDUSIND BANK LTD.”

Undertaken at
INDUSIND BANK, AGRA
10th April to 10th June 2009

Submitted by
SUBODH AGARWAL
Enrollment no. : 4108163163
Management of Business Finance
INDIAN INSTITUE OF FINANCE

CORPORATE GUIDE:
MR. ASHOK SHARMA
ASST. MANAGER
AGRA BRANCH, AGRA
UTTAR PRADESH.

ACKNOWLEDGEMENT

Expressing gratitude is not just an exercise of formality rather doing so evokes the memories of my association with my mentors and mates. I thank Chairman Prof. J. D. Agarwal and Director Aman Agarwal for allowing me to carry out this project. I wish to express my sincere gratitude to my corporate guide, Mr. Ashok Sharma for guiding me to understand the concepts those were not clear to me. I learnt a lot from his professional sknowledge.

SUBODH AGARWAL
4108163163
Management of Business Finance

Preface

As a part of Management of Business Finance (MBF) programme, a student has to pursue a project duly approved by the Director of the Indian Institute of Finance. I had the privilege of undertaking a project on “Risk Management by INDUSIND BANK LTD.”

My project report is divided into seven chapters and they are given as under:

Chapter 1 INTRODUCTION

Chapter 2 Review of literature

Chapter 3 Research Methodology

Chapter 4 Analysis

Chapter 5 Consist of Findings, Conclusion, Suggestions, Limitations

SIGNATURE:
Name: SUBODH AGARWAL
Enrollment No.: 41O8163163 Management of Business Finance

CERTIFICATE

This is to certify that “Risk Management by Indusind Bank” was carried out by Mr. Subodh Agarwal (4108163163) as a part of the requirement of Management of Business Finance programme. This project is being submitted for approval to the Indian Institute of Finance.

I declare that the form and contents of the above mentioned project are original and have not been submitted in part or full for any other degree or diploma of this or any other Organization/Institute/University.

Signature:
Name: SUBODH AGARWAL
Enrolment no.: 4108163163
Management of Business Finance

EXECUTIVE SUMMARY
The project aims at studying the various risk attached to the banking sector, specifically with regard to IndusInd bank and to develop an understanding for evaluating, measuring, controlling and exploiting it. The risks faced by the banks arise on account of a number of factors. Unless a bank has a comparative advantage in managing risks, there is no reason for the bank to absorb these. Market or systematic risk is the risk caused due to adverse changes in market variables such as Interest Rate, Foreign Exchange Rate, Equity Price, and the Liquidity risk as banks fund long term assets (loans) with short term liabilities (deposits) thereby exposing themselves to the funding, time and call risks. Market risk can be hedged but cannot be diversified completely.

Management of Market Risk is a major concern for every bank. The board should decide the risk management policy of the bank and set limits for liquidity, interest rate, foreign exchange and equity price risks. Ensuring that market risk management processes (including...
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