Modern commercial banking, 2nd Edition

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.

Banking systems in vogue.
Functions of a commercial bank.
Functions of bank capital.
Investment management.
Retail banking.
Risky loans.
Efficiency of banks.
Risks in banking, credit risk, interest rate risk, liquidity risk and foreign exchange risk.
Derivatives for risk management.
International banking.


About the Author(s):
H.R. Machiraju is a Financial Economist. He obtained his Ph.D. in Economics from Indiana University (USA) in 1960, spent the succeeding years teaching, undertaking research and organising Executive Development Programmes (EDPs). He taught at the Andhra University and BITS (Pilani) and has organised EDPs at IFMR (Chennai) and MDI (Gurgaon), and had research stints at NCAER and RBI.

Professor Machiraju`s contribution to Capital Markets area was acknowledged by the High Powered Committee on Stock Exchange Reforms in their report of 1984. Apart from publication of a number of articles and reports, he has authored several books on banking and finance, including The Working of Stock Exchanges in India, Merchant Banking, Mergers Acquisitions and Takeovers and Modern Commercial Banking , which are widely used by both students and professionals.

Contents:
Banking in the New Millennium
Evolution of Commercial Banking
Banking Systems
Functions of a Commercial Bank
Analysis of Assets and Liabilities of Scheduled Commercial Banks
Efficiency of the Banking System
Management of Capital
Risks in Commercial Banking
Derivatives for Risk Management
Interest Rate Risk
Liquidity Risk
Credit Risk
Investment Management
Foreign Currency Dealing
Foreign Currency Risk
International Banking