| This paper is the first to assess the quantity and quality of regulatory risk management reporting within the Indian banking sector. Since the global financial crisis, risk management disclosure and transparency within financial services firms particularly banks, has increased significantly in importance. Pillar III (market discipline) of the Basel Accord provides banks with a reporting framework; ensuring a minimum level of consistency and transparency to the structure of risk management disclosure. Using a sample of 39 private and public sector banks in India, a content analysis of their Basel II disclosures from their annual reports for the year 2012 is examined. While the majority of the disclosure focuses on credit risk and capital adequacy ratios, the total quantity of disclosure varies significantly across the banks, with surprisingly much less reported on their credit risk mitigation processes. Of the three broad risk categories, operational risk accounts for the least amount of disclosure across all banks, suggesting that the Indian banking sector is likely to be in the early stages of developing its operational risk management practices, and that operational issues could be a potential source of risk to the sector. |
Updated 03/19/2014