Risk management practices in HDFC Bank: A case study in Odisha

HDFC Bank is one of the largest private banks in India and is best known for its vast Pan-Indian network service reaches, including that of Odisha, offering services to both corporations and individuals. An important pillar in the financial system, it boasts 80 million account holders in India and a market capitalization of more than ₹12 trillion. This study examines specific risks in retail and corporate banking, including credit defaults, operational inefficiencies, and regulatory compliance issues, which have implications for the overall stability of the financial system. The primary objective is to assess these risks and develop effective mitigation strategies to enhance banking security and customer trust. The research utilizes primary data collected from employees and staff of HDFC Bank in Odisha. The study evaluates the bank's governance system, regulatory compliance, and technology innovation in risk management. Statistical hypothesis testing is used to assess the effectiveness of the bank's governance and risk management processes. HDFC Bank employs management techniques to ensure sounding credit and liquidity risk management practices backed by advanced fraud detection systems and internal controls in place,” the results stated. Market risk remains an underdeveloped area in its strategic focus. The bank's governance and risk mitigation processes prove to be fairly effective, statistically, based on hypothesis testing. Additional investment in AI-based cybersecurity, block chain-based collateral verification, and risk-sharing models can enhance the bank's financial resilience, potentially improving its operational efficiency.