Page 41 - Risk Management in current scenario

1, 2013 in India in phases and will be fully implemented by March 2019.
The Basel reform is based on a capital calculation based on the risks that
banks undertake, so any bank taking undue risks will have a higher capital
requirement. If risks are managed well, the bank will be benefited through
optimal capital requirement; and that is where risk management will add
value. It can be concluded that the application of risk management in
the banking sector is likely to increase manifold.

Similarly, to make the insurance sector in India more resilient to internal
and external changes, the insurance regulator, IRDA has set up a
committee on risk-based capital which has given its report. Further
communication from the insurance regulator in this regard is expected
in the future.

Post implementation of the risk-based capital regime in India, the
application of risk management will rise as this will directly impact the
shareholders' optimization of capital.

Apart from these highly regulated financial industries in India, the
requirement of risk management under Company law 2013 will further
increase application of risk management across different sectors.

It is evident that risk management in the next decade will be a tool that
shareholders will look into to add value to their business and protection
of customers.

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