| dc.description.abstract | Credit risk is one of the important topics in banking industry. It is the uncertainty that the borrower
will default or fail to pay back the loan at the exact time and amount. Credit risk, therefore, arises
from the bank’s dealings with or lending to corporate, individuals, and other banks or financial
institutions.
Generally, credits are the largest and most obvious source of credit risk. The traditional approach
to managing credit risk, is to evaluate the risk by assessing the borrower’s ability to repay. This
involves examining historical financial statements of the counterparty and projecting future ability
to pay.
Prime Bank Limited (PBL) is fast growing and second-generation private bank in Bangladesh. This
Bank is already at the top slot in terms of quality service to the customers, and at the value addition
to the shareholder. It has a mission to be an efficient, market driven, customer focused institution
with good corporate governance structure and vision to be the best Private Commercial Bank in
Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management &
profitability having strong liquidity.
I have collected my necessary information from both Credit Risk Management department and
branch level to successfully understand the whole process. I have also tried to focus on the
performance of credit risk management in my report by conducting different tables and figures
related to credit risk management. I have used both primary and secondary data to prepare this report.
Primary sources are officers and manager of PBL secondary sources are books, e-book, journal,
various business-related articles, internet etc.
Credit planning implies efficient utilization of scarce (loanable fund) to generate earning for the
bank. The goal of credit risk management is to maximize a Bank’s risk adjusted rate of return by
maintaining credit risk exposure within acceptable parameters. The effective management of credit
risk is a critical component of a comprehensive approach to risk management and essential to the
long-term success of any banking organization. The Board of Directors is responsible for approving
and reviewing the credit risk strategies and policies of the bank periodically. PBL follows sound,
well defined credit-granting criteria.
These criteria include thorough assessment of the borrower or the counterparty, as well as the
purpose and structure of the credit, and its source of repayment.
Credit Risk Management is very important for any bank. That’s why decision regarding credit is
very important in all respect of the Bank. PBL has proper credit management policies that describes
what type of loans protect the Bank’s soundness and also help to meet the needs of the communities
the Bank serves. | en_US |
