MANAGEMENT OF RISK IN THE BANKING SECTOR

Abstract

The study is mainly on risk management in Okomfo Anokye Rural Bank Ltd. The study focused on the identification of the various types of risk facing O.A.R.B.Ltd. and how best these risk identified could be controlled to the barest minimum.

The study again sought to determine the various steps used to control risk in O.A.R.B.Ltd and how best proper risk management could lead to maximization of shareholders wealth. The methods used for the study were data collection techniques which involve the use of questionnaires and interviews, as well as quantitative and qualitative approach to research.

The findings of the study were : Okomfo Anokye Rural Bank Ltd. faces loan default risk, risk involving payments of entitlements to staff and customers who are hurt by the bank in the course of its operations, payments of forgery cheques, wrong crediting and debiting of customers accounts by staff and risk involving fluctuations in exchange rate on the market.

The study concluded that the Bank has internal risk management mechanism in place but it does not have department purposely for risk management.

However, it was recommended that O.A.R.B.Ltd. should have a risk management department in order to handle all issues that concern risk so as to reduce losses associated with risk.