Risk Management Practices of Dhaka Bank PLC

Abstract

This report aims to analyze the risk management practices of Dhaka Bank PLC in order to fulfill the requirements of the Bachelor of Business Administration Internship Course at United International University. The main aim of this report is to evaluate the risk management practices of the bank in managing various types of risk in an effective manner and complying with the regulatory requirements. This report incorporates both primary and secondary data. The primary data was obtained through the personal experience of the intern at the bank, observation of the risk management practices of the bank, and discussions with the officials of the bank. On the other hand, the secondary data was obtained through annual reports of the bank for the period of 2019-2023, Bangladesh Bank circulars, and Basel guidelines. From the findings of this report, it can be concluded that credit risk is the major risk for the bank. The bank manages credit risk in an effective manner through its loan approval process, internal credit rating systems, diversification of loan portfolios, and strong provisioning. The NPL ratio and cost of risk have been improved over the years. Moreover, liquidity risk is well managed through the maintenance of regulatory ratios like LCR, NSFR, and SLR in excess of the required levels. Market risk is managed through the supervision of ALCO and gap analysis, whereas operational risk is managed through compliance systems, IT security systems, and training of employees. Overall, it can be concluded that the risk management system of Dhaka Bank PLC is well structured and constantly improving in conformity with regulatory requirements, and suggestions for improvement in digital risk management and analytics-based risk management can be made