RISK MANAGEMENT IN BANKING AND FINANCIAL INSTITUTIONS

Abstract

Abstract - Risk management is a critical function in banking and financial institutions as it ensures financial stability, profitability, and long-term sustainability. Banks face various types of risks such as credit risk, market risk, operational risk, and liquidity risk. Effective risk management helps institutions minimize losses, maintain customer trust, and comply with regulatory requirements. This paper explores the concept of risk management, types of risks, strategies adopted by banks, challenges, and future prospects in the financial sector.

Keywords: Risk Management, Banking Sector, Credit Risk, Liquidity Risk, Financial Institutions, Basel Norms.