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Risk Management In Banking And Insurance (RMBI) (Paper-20B) CMA Final Electives

Taught by Faculties:

Syllabus

SECTION A: RISK MANAGEMENT IN BANKING [60%]

1. Introduction to Risk Management - 5%
  • Concept of Risk
  • Risk vs. Uncertainty
  • Types of Risk
  • Risk Management – Concept and Approaches
  • Risk Management Strategies
2. Interest Rate Risk and Market Risk - 15%
  • Interest Rate Risk Management
    • Concept
    • Source
    • Term Structure of Interest Rates and Yield Curve
    • Interest Rate Risk and Credit Risk
    • Measuring Interest Rate Risk
    • Interest Rate Risk Measurement and Basel Norms
    • Managing Interest Rate Risk
  • Market Risk Management
    • Market Risk and its Types
    • Calculating Market Risk Exposures
    • Market Risk and Basel Norms, Value-at-Risk (VaR)
    • Sources of Foreign Exchange Risk Exposure
    • Foreign Asset and Liability Positions
    • Interaction of Interest Rate
    • Inflation and Exchange Rates
    • Hedging Market Risk
    • Dynamic Hedging Strategies
3. Credit Risk and Liquidity Risk - 15%
  • Credit Risk Management
    • Credit Risk Exposures, Types
    • Credit Risk Measurement Models – Merton’s Model
    • Credit Risk Measurement and Basel Norms
    • Managing Credit Risk
  • Management of Non-Performing Assets (NPAs)
    • Definition, Concept and Categorisation of NPAs
    • Choices available to Banks for Management of NPAs
    • Trading of NPAs
    • Status of NPAs in Banks in India
  • Liquidity Risk Management
    • Liability-side and Asset-side Liquidity Risk
    • Types of Liquidity Risk Events
    • Liquidity Risk vs. Credit Risk
    • Liquidity Risk in Insurance Services
    • Measuring Liquidity Risk
    • Managing Liquidity Risk
    • Asset Liability Management – Concept
    • Role of ALM in managing Interest Rate Risk and Liquidity Risk
    • RBI Guidelines
4. Sovereign Risk and Insolvency Risk - 10%
  • Sovereign Risk Events
  • Debt Repudiation versus Debt Rescheduling
  • Evaluation of Sovereign Risk
  • Mechanisms for dealing with Sovereign Risk Exposures
  • Insolvency Risk Analysis through Capital Adequacy Ratios
5. Operational Risk and Off-Balance Sheet Risk - 15%
  • Operational Risk – Identification and Assessment, Basel Norms
  • Monitoring and Mitigating Operational Risk
  • Off-Balance Sheet Risk Exposures
  • Loan Commitments
  • Commercial Letters of Credit, Letters of Undertaking and Bank Guarantee
  • Derivatives
  • Deposit Insurance
  • Nature of Off-Balance Sheet Risks
 

SECTION B: RISK MANAGEMENT IN INSURANCE [40%]

6. Introduction to Insurance Business - 10%
  • Definition, Concept and Features of Insurance
  • Principles of Insurance
  • Role of Insurance towards Economic Growth
  • Difference between Insurance Companies and other Financial Institutions
  • Insurance Regulatory and Development Authority (IRDA) – Objectives, Statutory Powers and Functions of IRDA
7. Insurance Intermediaries, General Insurance, Health Insurance and Life Insurance - 15%
  • Insurance Intermediaries
    • Insurance Agents
    • Surveyors and Loss Assessors
    • Insurance Brokers
    • Third Party Administrators (TPAs)
    • Bancassurance
    • Other Channels
  • General Insurance
    • Principles
    • General Insurance Products
    • Tariff Advisory Committee (TAC)
    • General Insurance Council
    • De-tariffing in General Insurance
    • IRDA’s Exposure/Prudential Norms
    • Solvency Margins of Non-life Insurers
  • Concept and Types of Health Insurance Policies
  • Structure and Type of Re-insurance
  • Life Insurance
    • Principles and Characteristics
    • Types of Life Insurance Products
    • Solvency Margins of Life Insurers
    • Various players in Life Insurance Business
    • LIC of India
    • Post Office Life Insurance
    • Other Players
8. Managing Risk in Insurance Business - 15%
  • Concept of Risk in Insurance Business
  • Factors affecting Risk Profile of Insurers
  • Kinds of Risks in Insurance – Portfolio Risk, Solvency Risk, Marketing Risk, Market Risk, Operational Risk and Other Risks
  • Risk-based Capital, Types of Risk-based Capital – Current Risks, Special Risks, Non-technical Risks
  • Risk Management Process in Insurance
    • Risk Identification
    • Risk Assessment
    • Risk Treatment
    • Risk Reduction
    • Risk Review and Monitoring
  • Role of an Actuary in Insurance Business