Credit risk management of commercial Banks in Bangladesh

Abstract

Credit risk management needs to be robust process that enables banks to proactively manage loan portfolios in order to minimize losses and earn an acceptable level of return for shareholders. Credit risk can be seen as the presence of different potential results when a bank makes an advance or other augmentation of credit. The conceivable result extends from full and auspicious installment as indicated by the agreement, right to a total nonappearance of any reimbursement (an absolute misfortune on the credit). Bank keep eyes towards parity dispensing ought not to be concentrated to some restricted geological regions/areas. As test I have chosen 5 private banks. The goal of the report to distinguish credit risk position of chosen banks, their arrival, exceptional sum and so on and additionally look at among of those bank. Those data is gathered from optional sources like yearly report, articles and so forth. Credit is presentation in various zone and division. In some segment reimbursement is nonappearance or suspicious that is making credit risk. Loan identified with acknowledge risk as well as store and different speculations additionally related with it. Banks give advance from their store area. Such sorts of credit are given at some development period. On the off chance that reimbursement crosses the development time frame, at that point it will make misfortune or hazard. Less store additionally makes credit risk. On the off chance that administration division of bank structure credit risk the executive’s framework, at that point credit risk can be limit or misfortune might be diminish. Bank need to focus that where they contribute or give advance, client profile, probability of misfortune and so on the off chance that they alert about that, at that point credit risk might be overseen. Banks benefit is for the most part influenced by credit chance. Less intrigue give poor benefit. That is the reason banks give significant on CRM framework. Bangladesh bank additionally gives some rule or structure about it, and many banks pursue BB rule or at some point they change it and make their very own system.