Articles by D Tripati Rao

While the recent incidents of catastrophic business failures and Basel II requirements of capital charge for operational risk have increased awareness about the latter, it has also sparked a debate on its measurement as well as its management. This is an analysis of the compelling reasons for an objective and effective management of operational risk and a brief recall of the present methods for measuring and modelling it. Subsequently, through the results of a survey to take stock of the preparedness of Indian banks in managing such risk, the authors find that the Indian banking sector is still in its preparatory stage and is constrained in implementing a sound operational risk management system as it is wanting in risk transfer and its quantification.

The macroeconomic implications of privatisation and foreign participation in the insurance sector, especially the life insurance sector, are far-reaching as the life insurance industry, coterminous with the Life Insurance Corporation (LIC) of India, is dominant in two aspects: pooling and redistributing risks across millions of policyholders and performing financial intermediation. The issue of privatisation and foreign participation must be approached cautiously with a 'step-by-step approach', and should be preceded by microeconomic institutional and legal reforms.