Assessment and evaluation of Credit Risk Management in United Bank

Abstract

The financial sector plays vital role in any economy by transferring funds from surplus to deficit area by giving credit. In today‟s changing financial lands cape-environment of intense competitive pressure, volatile economic conditions, rising bankruptcies, and increasing level s of consumer and commercial debt; an organization‟s ability to effectively monitor and manage risk associated to credit become critical. Therefore, managing its credit risk, using the credit risk management tools Hence it is essential to overview of the credit risk management practice of the banks and identifies the gap to take proactive measures and to protect the banks from any damage. Therefore, the research to identify the gap on credit risk management practices of united bank data has been collected from primary and secondary sources. In obtaining information from the primary data, a survey questionnaire was developed Simple random sampling technique was used to select respondents of the Bank and the data were collected from credit professionals the secondary date use to annual report and magazine different research published and unpublished The risk factors classified in two internal and external, the internal is human resources, system and bank rule & regulation credit rate experienced etc. & external inflation ,defilation, unemployment rate ,GDP, interest rate, business area, business type & marketed situation awareness about the loan & procedure customer educational background business experienced credit culture in societies etc. This implies the risk control methods developed the credit risk management main target is identifies major risk and how to can minimize the risk happiness give alternative and or situations The study found that lack of information system that support the risk management process, absence of risk identification focused tools on customers‟ business and the associated environment, unsound lending practices associated to credit processing and appraisal activities it is suggested that Bank should build well organized management information system, should put in-place a system capable of assessing, monitoring and controlling risk exposures in more scientific manner, should give a key concern to minimize concentration risk and should develop code of conduct to proactively monitoring ethical standards, and prudent application of policies.