Browsing by Author "Joshua, Vinuthan"

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    A Study on Credit Risk Management with Reference to State Bank of Mysore
    (2016-08-17T14:26:50Z) Joshua, Vinuthan
    State Bank of Mysore is one of the earliest banks from the 20th century in the country, it is one of the associates of State Bank Group. It was started as Bank of Mysore Ltd in 1913. It was founded by the then Government of Mysore with a banking committee which was headed by Dr. Sir M Visvesvaraya with its headquarters situated at Bangalore. Credit risk Management is of great importance to any lending institution especially in banking sector. No lending decision is risk free. Risk involved in any decision cannot be measured in absolute terms/units. It can be assessed relatively on the basis of available information. The objectives of the study is to understand the activities pertaining to credit risk management at State Bank of Mysore, examine the exposure to credit risk of the bank, study the impact of risk management in reference to capital adequacy, evaluate the asset quality of state bank of mysore and also provide valuable suggestions based on the study. The finding from the study is that the bank has proper loan appraisal and follow-up and very careful loan screening procedure is undertaken by the bank and also the timely disbursement of approved loans is done to avoid defaults, the bank has primarily lend loans to the Priority Sector and Other sectors such as agricultural finance, MSEs, Self Help groups, women entrepreneurs etc. Due to steps taken like reclamation, restructuring, sale of assests of defaulters of the by Bank has considerably bought down its overall NPAs level by 33% causing in lessening of Bank’s net NPAs to 2.10%. The suggestion from the study is to the bank is that Bank can reduce risk through diversification of portfolio like lending loans to many of the sectors instead of lending to particular sectors, it can use derivatives more meticulously for credit risk management as it is very effective method of reducing risk and clear all NPAs to have a higher income to the bank. The research can concluded by saying that the bank has to concentrate towards the assessment of risk, reducing the risk which is involved in lending credit. If NPA level increases, the profitability decreases. Lower the NPA, the profitability and value of the bank increases. So bank mainly should concentrate on reducing the non-performing assets (NPA) and lessen the risk by diversification of portfolio for lending loans.