Financial Risk Management

A decade ago, the concept of Financial Risk Management was confined to Western countries or developed countries. Financial Risk Management was having very little presence in Indian Financial Industry. Basel I forced some big international banks to follow risk management practices. Thanks goes to BIS and BASEL II document for wide acceptance of Financial Risk Management concept by banks and financial institutions worldwide. In India also, implementation of Basel II norms has been satisfactory. However, many financial institutions in India are missing risk culture and risk awareness among their finance managers. Till the time in 2007, RBI forcefully imposed implementation of Basel II norms on Indian banks, it was kept in back burner. RBI had issued a deadline to implement Basel II norms to the Indian banks with the international presence by 31st March`2008 and for the others by 31st March`2009. The challenge of RBI has now increased many fold by introduction of Basel III. The implementation of Basel III will start from 1st January `2013 and needs to be completed by 1st January` 2019.