What Is Risk & Risk Management.

1. EDP : IIMKashipur(AFRM)
MBA-BHU: Risk Management

2. What Is Risk?
 A chance of encountering harm or loss, hazard,
danger.
 To expose to a chance of injury or loss.
 Ex: Inside every mall have chance of occurrence of
fire due to cause of electricity or so on .

3. What Is Risk Management In
General?
 Risk Management is a planned method of dealing
with the potential loss or damage.
 Ex: Fire safety kits always present inside every
mall. That’s because chance of occurrence of
hazardous event can minimize.

4. Risk Management
 Risk Management is not to prohibit or prevent risk
taking activity, but to ensure that the risks are
consciously taken with full knowledge, purpose
and clear understanding so that it can be
measured and mitigated.
 It also prevents an institution from suffering
unacceptable loss causing an institution to suffer
or materially damage its competitive position.

5.  Example: Suppose we want a loan from the bank
what bank do, bank not gives us loan instantly
rather than they ask us about our properties etc.
Because in case we are disable to pay our debt to
bank, Bank uses our properties to compensate that
loan. In case of Big amount bank also ask of
guarantor.

6. Types of Risk Management
 CREDIT RISK
 MARKET RISK
 OPERATIONAL RISK
 REGULATORY RISK
 ENVIRONMENTAL RISK

7.  Market Risk: It is defined as the possibility of loss
caused by changes in the market variables such as
interest rate, foreign exchange rate, equity price
and commodity price.
 Credit Risk: The potential that a borrower or
counter party will fail to meets its obligations in
accordance in agreed terms.
 Operational Risk: Risk of loss resulting from
inadequate or failed internal process, people and
systems or from external events.

8.  Regulatory Risk : The owned funds alone are
managed by an entity, it is natural that very few
regulators operate and supervise them. However,
as banks accept deposit from public obviously
better governance is expected from them. This
entails multiplicity of regulatory controls. The
various regulators include Reserve Bank of India
(RBI), Securities Exchange Board of India (SEBI).

9.  Environmental Risk: As the years roll the
technological advancement takes place,
expectation of the customers change and enlarges.
This provides the platform for environmental
change and exposure of the bank to the
environmental risk

10. Thank You For Listening.