Sana.docx

FINDING

The research study carried out at HDFC Bank under the topic ―CREDIT RISK MANAGEMENT in banking- a study of HDFC bank‖ to fulfill the said motive turned out to be useful in understanding the various policies and practices used by the bank to manage the different types of risk that arise in banking As per the above diagram (1) it show of risk management in hdfc bank in terms of credit is 50% i.e. very high as compare to others As per the above diagram (2) the risk management in hdfc bank in terms of market risk is 40% i.e. very high as compare to others As per the above diagram (3) the risk management in hdfc bank in terms of liquidity risk is 70% i.e. very high as compare to others As per the above diagram (4) the risk management in hdfc bank in terms of operational risk is 60% i.e. very high as compare to others.

As per the above diagram (5) the risk management in hdfc bank in terms interest risk of is 45% i.e. very high as compare to others. As per the above diagram (6) the risk management in hdfc bank in terms of foreign exchange bank is 10% i.e. very low as compare to others. As per the above diagram (7) the risk management in hdfc bank in terms of other risk is 60% i.e. very high as compare to others As per the above diagram (8) the customer feels very secure while investing hdfc bank 80%i.e. very high As per the above diagram(9) its show dealing with hdfc bank are daily basis is very high as compare to weekly and monthly , others . RECOMMENDATIONAND SUGGESTION 

The Bank should keep on revising its Credit Policy which will help Bank‗s effort to correct the course of the policies

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The Chairman and Managing Director/Executive Director should make modifications to the procedural guidelines required for implementation of the Credit Policy as they may become necessary from time to time on account of organizational needs.

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Banks has to grant the loans for the establishment of business at a moderate rate of interest. Because of this, the people can repay the loan amount to bank regularly and promptly.

Conclusion 

With the correct measure of the credit risk, its management will become effective and efficient. This research work concentrates on developing an approach to measure the credit risks associated with various borrowers of a bank. For this the major assessment parameters for the bank are taken as the predictor variables. There are many approaches to developing credit risk model which have been discussed already in interim report

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is difficult to say conclusively,

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which of the approaches has the best ability to predict default, each having its pros and cons. The stock price-based model is conceptually appealing, as there is an explicit theoretical foundation of this model On the other hand, accounting-based statistical methods rely more on statistical relationships rather than on any financial principle .However, with the absence of any theoretical structure, accounting based statistical approach which also forms the basis of my study can act more flexibly by incorporating or excluding the explanatory variables depending on their information content.

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It is more prudent to look at these two approaches as supplementing each other by providing additional information, which the other does not possess. The choice depends on the individual business circumstances and portfolio specifics of each bank. Depending on the circumstances, it may sometimes be prudent to use both types of methodologies simultaneously to refine the credit decision system of the bank.

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The availability of data is a major constraint for such studies and with the availability of more accurate data such findings can be even more useful for a bank. The credit risk modeling may indeed prove to result in better internal risk management a t banking institutions. However, key hurdles, principally concerning data limitations and model validation, must be cleared before models may be used in the process of setting regulatory capital requirements

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The project undertaken has helped a lot in gaining knowledge of the Credit Policy and Credit Risk Management‖ in Nationalized Bank with special reference to HDFC BANK

RECOMMENDATIONAND SUGGESTION 

The Bank should keep on revising its Credit Policy which will help Bank‗s effort to correct the course of the policies

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The Chairman and Managing Director/Executive Director should make modifications to the procedural guidelines required for implementation of the Credit Policy as they may become necessary from time to time on account of organizational needs. Banks has to grant the loans for the establishment of business at a moderate rate of interest. Because of this, the people can repay the loan amount to bank regularly and promptly Bank should not issue entire amount of loan to agriculture sector at a time, itshould release the loan in installments. If the climatic conditions are good thenthey have to release remaining amount HDFC has to reduce the Interest Rate.

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HDFC has to entertain indirect sectors of agriculture so that it can have morenumber of

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borrowers for the Bank. 