The present Paper “Contemporary Issues and Challenges of Basel II Accord in Risk Management of Indian Banking Industry ” deals with various types of Risks that the banks are exposed to and rightly managed under the domain of Basel's New Capital Accord (which is well known as Basel-II). The term “Risk” indicates an exposure to a transaction with loss, which occurs with some probability and which can be expected, measured and minimized. Risk is inherent in any walk of life in general and the financial sectors in particular. In Financial Sector, especially, the banking industry is passing through a process of change, in most of the emerging economies including India. These changes include increasing deregulation, Global Competition, New Financial Reforms, Increased Volume of business, innovative products etc. have pushed the risk management to the forefront of financial landscape. These exposures led the bank to encounter various types of Financial and Non-Financial Risks. The main three categories of risks that appear in the banking parlance are Credit Risk, Market Risk and Operational Risk. This paper has made an attempt to study the various risk dimensions and also the structure and components of Basel II and throws light the challenges for implementation of Basel II in Indian Banking Industry.
Basel II Accord, Credit Risk, Market Risk, Operational Risk, Risk Management
