Study on the awareness of customers in Chennai on the need and importance of risk management policy: HDFC Bank, Chennai

Abstract

This project deals with the study of the awareness of customers in Chennai on the need and importance of Risk Management Policy (RMP). Though the title is quoted, only Forex risk is studied under the project, given the limited time of eight weeks between 8th April, 2013 and 31st May, 2013. There are two reasons why Risk Management is important for companies today: the increasing fluctuations of the value of INR against USD and the circular given by Reserve Bank of India which advises the banks to charge risk premium in Foreign Currency (FCY) loans for the clients who have an exposure in terms of FCY and no natural hedge. Keeping in view of this, the framework for the project is designed. A questionnaire to find out the corporates’ view towards the market conditions and their philosophy towards Forex risk is designed. A model RMP is drafted and is shown to all the clients interviewed. Based on the answers they gave about the questionnaire and their rationale behind their views on their risk, analysis is quantified and the results of analyses are shown in a separate section. Then key findings are listed out, followed by the recommendations for the bank. Along with these, a brief introduction of Indian derivative market and Indian Forex market is given in the beginning of the report.