MIS Sustain Credit Riskmetrics Vis a Vis the Future of Indian Banking System

A.K. Saini; Deepak Tandon

A.K. Saini University School of Manageme GGS Indraprastha University, Delhi, India
Deepak Tandon Lal Bahadur Shastri Institute of Management (LBSIM), Dwarka, New Delhi, India

Keywords: Risk metrics Banking System Expected Loss [EL] Capital Adequacy Requirement [CAR], KMV Model EAD – Exposure at default Probability of Default [PD] Loss given default [LGD]

Abstract

The Indian Economy is booming on the back of strong economic policies and a healthy regulatory regime. The effects of this are far reaching and have the potential to ultimately achieve the high growth rates that the country is yearning for. The banking system nucleus of a country's development robust reforms are needed in India's case to fulfill that. The BASEL III accord from the Bank of International Settlements attempts to put in place sound frameworks of measuring and quantifying the risks a operations by 2019.
The paper seeks to showcase the changes that will emerge as a result of banks adopting the international norms and whether they will be able to sustain the pressures and shocks of the changing scenarios. This e the complete scenario that will emerge in the years ahead. The Risk Management scenario will strengthen owing to the liberalization, regulation and integration with global markets. Management of risks will be carried out proactively and quality of credit will improve, leading to a stronger financial sector.