Financial Counterparty Credit Risk Management Process of Banglalink Digital Communications Limited

Abstract

The objective of the report is to analyze the financial counterparty credit risk management process of Banglalink Digital Communications Limited. This study is the reflection of my learning from my responsibilities and experiences from doing my internship at Banglalink. To prepare this report, the required information was collected from both primary sources and secondary sources. I did my internship at the treasury department of Banglalink Digital Communications limited. In this report it was studied how the credit risk of the financial counter parties of Banglalink are evaluated using seven factors. Each factors has a standard that the financial counter parties have to maintain. By checking these factors we can get idea about the credit risk of the financial counterparties of Banglalink. By analyzing all the financial counterparties of Banglalink Digital Communications limited based on each of the seven factors we came to the conclusion that Brac Bank, Standard Chartered Bank and Pubali Bank Limited show the least credit risk, and Mutual Trust Bank and Islami Bank Bangladesh Limited have the highest credit risk among the financial counterparties. The rest of the financial counterparties of Banglalink seems to have low credit risk. And Banglalink is recommended to increase their credit limit for Brac Bank, Standard Bank and Pubali Bank as they carry the least credit risk among all the financial counterparties of Banglalink. And as Mutual Trust Bank and Islami Bank Bangladesh Limited shows the highest credit risk among its financial counterparties Banglalink should reduce credit limits for these banks. If these banks continue to show higher credit risk in the future Banglalink should close accounts with these banks and shift to other banks with lower credit risks if possible.