An Investigation of Credit Risk Management Strategies of Private Commercial Banks of Bangladesh
Journal: Global Journal of Business and Social Sciences Review (GJBSSR) (Vol.2, No. 2)Publication Date: 2014-06-30
Authors : Abu Hanifa Noman; Amzad Hossain; Sajeda Pervin;
Page : 77-87
Keywords : Bangladesh; Commercial Bank; Credit Risk; Credit Risk Management; Credit Risk Management Strategies.;
Abstract
Objective - The study aims to investigate credit risk management practices and credit risk management strategies of the local private commercial banks in Bangladesh. Methodology - The investigation is conducted based on primary data collected from a set of both closed end and open end questionnaire from 23 out of 39 local private commercial banks in Bangladesh. Descriptive statistics has been used in processing the data and interpreting the results. Findings - The results reveal that credit risk management practice of the sample banks is sound which is attributed to the appropriate implementation of Basel II and credit risk management guidelines the country's central bank. The findings further show that use of Credit risk grading is most popular and effective criteria for measuring the borrowing capacity of the borrowers. In order to control credit risk and preventing losses from credit exposure banks give more focus on collateralization, accurate loan pricing and third party guarantee. Loan is monitored properly and credit reminder is given to the client if principal and interest remain outstanding for three months. The study further reveals that lack of experienced and trained credit officers, lack of genuine market information and Lack of awareness regarding non-genuine borrower are the most important problems of current credit risk management practices in Bangladesh. Novelty - To the best of the knowledge of the authors the study is the first that investigates credit risk management strategies of private commercial banks, especially on Bangladesh. Type of Paper: Empirical
Other Latest Articles
- A Conceptual Study of the Formation of Online Brand Equity: The Role of Online Brand Trust
- Investigating the Relationship between Knowledge and Complaint Behaviour among Motor Vehicle Repairs Consumers in Shah Alam, Malaysia
- The Importance of Investigating TESL Trainees’ Attitudes towards Communicative Language Teaching (CLT)
- Market Segmentation of Organ Donors in Malaysia: A Systematic Literature Review
- The Usage of Humour Elements in Instructional Communication and Their Roles in Students’ Achievement
Last modified: 2017-07-28 17:58:18