ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

D Tripati RaoSubscribe to D Tripati Rao

Preparedness of Indian Banks in Managing Operational Risk

While the recent incidents of catastrophic business failures and Basel II requirements of capital charge for operational risk have increased awareness about the latter, it has also sparked a debate on its measurement as well as its management. This is an analysis of the compelling reasons for an objective and effective management of operational risk and a brief recall of the present methods for measuring and modelling it. Subsequently, through the results of a survey to take stock of the preparedness of Indian banks in managing such risk, the authors find that the Indian banking sector is still in its preparatory stage and is constrained in implementing a sound operational risk management system as it is wanting in risk transfer and its quantification.

Budgetary Arithmetic, Fiscal Imprudence and Macroeconomic Implications

Notwithstanding the attempts made to undo the budget deficits initiating the fiscal reform process, the art of budget making in India is far from salutary both in terms of content, and macroeconomic and social implications. Given the political economy fundamentals (institutional constraints), the adherence to fiscal rules may, at best, contain the overall public expenditures through fiscal pruning measures, but may fail in addressing (i) the distributional effects of public expenditure policies, and hence, (ii) the composition of public expenditure.

Privatisation and Foreign Participation in (Life) Insurance Sector

The macroeconomic implications of privatisation and foreign participation in the insurance sector, especially the life insurance sector, are far-reaching as the life insurance industry, coterminous with the Life Insurance Corporation (LIC) of India, is dominant in two aspects: pooling and redistributing risks across millions of policyholders and performing financial intermediation. The issue of privatisation and foreign participation must be approached cautiously with a 'step-by-step approach', and should be preceded by microeconomic institutional and legal reforms.

Life Insurance Business in India

To develop a proper perspective of the ongoing debates on the privatisation and globalisation of the insurance sector a systematic study of the structure and pattern of growth of the Indian insurance industry is essential. An analysis of pattern of growth of life insurance industry - a state monolith - since its nationalisation in 1956 has been carried out. This article goes into the operating results of the Life Insurance Corporation and their macro-economic importance. The main focus of the article is the pattern and growth of life insurance business in India. Specifically, it deals with the analysis of growth of new business, business in force, income and outgo (financial outflow) life fund, i e, institutionalisation of savings, and business by different zones of LIC. Finally, these indicators are compared with the related macro variables.
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