Risk Aversion by Banks and the Ownership Pattern: A Study of Indian Scheduled Commercial Banks

The banks in India have been seriously in the trap of ever rising Non-Performing Assets for a very long time. This has led to many of the banks playing a cautious game by investing in the safest ventures, hence minimizing risk. Risk management measures are either Preventive or Curative. Preventive measures are primarily applicable for partial mitigation of credit risk and some forms of market risk. In this context, the present study is an attempt to study the Preventive measures in the form of level of Risk Aversion by various categories of banks in India. The paper tries to assess the determinants as well as the level of Risk Aversion by all the categories of Indian Banks. The study gives us a deep insight into the profitability criteria and credit disbursal by the Public, Private and the Foreign sector banks and so conclude about their relative importance both in terms of growth and social expansion.