HOW BASEL NORMS CAN HELP IN SOLVING THE NPA PROBLEM OF INDIAN PSB'S
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Author(s):
RAVIKUMAR PARESHBHAI TILAVAT
Vol - 6, Issue- 9 ,
Page(s) : 121 - 128
(2015 )
DOI : https://doi.org/10.32804/IRJMST
Abstract
Banks by their very nature of their business attracts several types of risks, viz., credit risk, market risk(which includes interest rate risk, foreign exchange risk and liquidity risk), operational risk, reputational risk, business risk, strategic risk, systemic risk to cite a few. Banks are exposed to these risks because of the business of banking which they undertake, which is defined in section 5 (b) of the Banking Regulation Act, 1949 as, "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise. Section 5 (c) further defines, "banking company" means any company which transacts the business of banking in India. This is also called the process of intermediation, which causes to for the above risks to happen. Section 6 (subsections A to O) of the Banking Regulation Act, 1949, further defines the functions of banks, which further exposes the banks to the above risks.
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