Over the last decade, there has been a huge debate that has risen around the issue surrounding risk management within banking sector mostly due to current monetary crisis. Numerous attempts were put in place with the objective of improving the risk management and performance in banking industry comprising the introduction of the Basel Accords and also risk management strategies by central banks. As a result, the South African state-owned Banks have allotted risk management policies to reinforce the risk management system and to enhance the functioning of the banking sector. But, the existing literature within South African perspective do not elucidate the influence of these attempts on the functioning of banks. Lin light of this, the present research paper aimed at examining the efficiency of risk management systems in the South African local banks. This paper appraises the related literatures on banking risk management as of various methodological aspects and develops a conclusion to contribute to the existing literature; mainly in addressing some flaws concerning risk management system in the South African baking sector