Modern commercial banking / H.R. Machiraju.

Includes index

Cover --
Preface to the Second Edition --
Preface to the First Edition --
Contents --
Chapter 1. Banking in the New Millennium --
Global Trends --
Domestic Trends --
Dichotomy of Approach --
Need for Holistic Approach --
Autonomy for Central Bank --
Asset Quality --
Currency Convertibility --
Off-Shore Banking Centre --
Banking and the Poor --
The Future --
Chapter 2. Evolution of Commercial Banking --
Market Oriented vs Bank Oriented Finanacial Systems13; --
Money Lending in Ancient India --
Chapter 3. Banking Systems --
Introduction --
Branch vs Unit Banking Systems --
Branch Banking --
Retail vs Wholesale Banking --
Wholesale Banking --
Universal Banking --
Universal Banking in Germany --
Universal Banking in United Kingdom --
Universal Banking in India --
Chapter 4. Functions of a Commercial Bank --
Special Nature of Banks --
Characteristics of Commercial Banks --
Payments Systems --
Intermediation --
Payment and Settlement System --
Real-Time Gross Settlement --
Other Financial Services --
Chapter 5. Analysis of Assets and Liabilities of Scheduled Commercial Banks --
Assets and Liabilities of Banks --
Liabilities --
Functions of Bank Capital --
Capital Adequacy --
Capital Standards in U.S.A --
Risk Adjusted Capital Requirements --
Review of Risk Weighted Approach --
Inter Bank Borrowing --
Relationship Between Money and Foreign Exchange Market --
CRR and SLR on Inter Bank Deposits --
Types of Deposits --
Ownership of Bank Deposits --
Other Liabilities --
Assets of Commercial Banks --
Investment in Government and Other Securities --
Loans and Advances --
Resolution of NPAs --
Classification of Assets --
Micro Prudential Norms --
Committee on Banking Sector Reforms (CBSR)199813; --
Mark to Market --
Bank Credit and GNP --
Credit Repression --
Strengthening the Banking System --
Systems and Methods in Banks --
Structural Issues --
Integration of Financial Markets --
Rural and Small Industrial Credit --
Regulation and Supervision --
Legal and Legislative Framework --
Chapter 6. Efficiency of the Banking System --
Introduction --
Internal Performance --
Bank Planning --
Personnel Development --
Appraising Bank's Condition --
Chapter 7. Management of Capital --
Definition of Bank Capital --
Long-Term Debt --
Loss Reserves --
Correction of Capital Deficiency --
Recapitalisation --
Mergers Among Banks --
Weak Public Sector Banks --
Chapter 8. Risks in Commercial Banking --
Nature and Need --
Transformation Services and Risks --
Rollover Loans Flexi Rates13; --
Internationalisation of Banking --
Overall Risk of a Bank --
Interest Sensitive Assets --
RBI Guidelines for Risk Management --
Chapter 9. Derivatives for Risk Management --
Nature of Derivatives --
Regulation of Risks --
Chapter 10. Interest Rate Risk --
Net Interest Income --
Futures, . Options and Swaps --
Swaps --
Types of Interest Rate Swaps --
Forward Rate Agreements and Interest Rate Swaps113; --
Chapter 11. Liquidity Risk --
Definition of Liquidity --
Sources of Liquidity --
Central Bank --
Collateralized Lending Facility --
Foreign Currencies --
Measuring Liquidity --
Liquidity Risk --
T.

The basic function of a commercial bank is risk management. Banks have to adopt a risk management approach to maximise shareholder value/net value and to conform to the RBI guidelines (1999). Further the adoption of ALM and diversification of activities to earn fee income has resulted in the assumption of risks which had to be hedged by derivatives. Since major banks are foreign exchange dealers, exchange risk and interest risk have to be covered. Finally derivatives themselves carry a lot of risk which has become a major concern of regulators. The book analyses and presents the concepts in banking in relation to the consolidated balance sheet of scheduled commercial banks in India. Risks have been identified and the tools available to hedge them are presented. All chapters are revised and enlarged to take into account the developments since the last edition.