Abstract:
The current research determined the scope of Enterprise risk management in banking sector of Pakistan with a focus on ERM practices and techniques adopted by local and foreign commercial banks in Pakistan. The analysis above revealed the ERM components and the difference between functional risk management and Enterprise risk management.
The research is conducted in local and foreign commercial banks in Pakistan. Questionnaires and structured interviews have been used as research instrument for the collection of data. The tools used for the statistical interpretation are frequency and percentage distribution.
The findings show that in the last few years, the popularity of the enterprise risk management has been on the rise in banking sector of Pakistan. Local banks are practicing good risk management on an exposure-by-exposure basis, but they are not paying close enough attention to aggregation of exposures across the entire organization as compared to foreign banks.
Finally, the researcher proposes some imperative recommendation to the personnel of local and foreign commercial banks that would benefit their respective institutions as they are striving for survival in a very dynamic environment.
