Internship report On Credit Risk Management policies of Bank Asia Limited

Abstract

Commercial bank’s primary role is to facilitate mobilization of money, which is vital for the economic growth of a country. How effective a bank is performing its role to a large extent depends on its management and governance of its credit related activity. For commercial banks the governance and assessment of the behavior of the borrower and the execution of the loan is as important as how well a bank distributes its funds among all the business sectors of a country. As these two things largely impact on profitability of a bank .Monitoring and governing of loan is named as credit management in banking industry. If a bank fails to perform this vital function properly it consequences in a higher POCL (percentage of classified loan). In this study, the general profitability measurements of banks- ROI, ROA and ROE are being tested to know how they are correlated with and influenced by POCL. After conducting the study the conclusion is that the study variables are correlated and POCL has a negative impact on each of the dependent variable ROI, ROA and ROE.