Today the banking sector is facing many challenges and significant losses. TheReserveBankofIndiahasbeenforcedtoadoptanumberofregulations tomitigatebanklosses.Providingloanstolow-incomepeoplewithoutadequatecollateralwhilestillhelpingsociety is Banks main problem. As a result, risk management in Banks has gainedsignificant importance. The primary goal of the researcher was to examine the various risk management techniques employed byBanks in India. The Study investigates the connection between risk managementtechniquesandriskfactors. As a sampling, six MFIs with Telangana statelocations were taken which are in the control of The Reserve Bank of India. The researcherfound that there is a positive correlation between effective risk management practices andthe financial performance of Banks.