Credit Risk Management Practices of Commercial Banks in Bangladesh

Management

Credit risk is defined as the probability that some of a bank’s assets, especially its loans, will decline in value and possibly become worthless. Because banks hold little owners’ capital relative to the aggregate value of their assets, only a small percentage of total loans need to go bad to push a bank to the brink of failure. Thus, management of credit risk is very important and central to the health of a bank and indeed the entire financial system. The present study has conducted to find out the credit risk management practices of commercial banks in Bangladesh and examine whether commercial banks of Bangladesh follow the rules and regulations of credit risk management policies. The study was conducted in the area of Dhaka city in Bangladesh. Five Banks were selected for the study such as Sonali Bank Ltd, Janata Bank Ltd, Agrani Bank Ltd, Bangladesh Development Bank Ltd and Islami Bank Bangladesh Ltd. From each bank 25 respondents were selected. So, total 125 respondents were selected. The respondents were credit risk related officer, mid level officer and management level officers. Data were collected from primary and secondary sources. Primary Data were collected from the respondents of the study area. Secondary data were collected from various secondary sources. Collected data were analyzed by using Computer Program Microsoft Excel.

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