Credit Risk Management System of National Bank Ltd: A Study on Lake Circus Branch

Abstract

Banks are most active financial intermediary in today’s world as a financial institution bank mainly operates to communicate among persons and effectively works as safeguard among them in this age globalization. Bank faces many of risk like credit risk, reputation risk, liquidity risk, and market risk etc. Credit risk is one of the major risks of them. To manage the risk they take various kinds of steps. This report is based on Credit Risk Management system and concentration is given on the National Bank. Here both primary and secondary sources of data are used. Personal observation and consultation with the concerned personnel is key sources of data. Risk is inherent in all aspects of a commercial operation; however for banks and financial institutions, credit risk is an essential factor that needs to be managed Credit risk is one of the major risks faced by the Bank. This can be described as potential loss arising from the failure of a counter party to perform according to contractual arrangement with the Bank .The failure may arise due to unwillingness of the counter party or decline in economic condition etc. This study mainly tries to find credit policy, credit approval process also find out credit disbursement credit allocation. This study also finds that credit risk management needs to be a robust process that enables banks to proactively manage loan portfolios in order to minimize losses and earn an acceptable level of return for shareholders.