scholarly journals Understanding risk management practices in commercial banks: The case of the emerging market

2018 ◽  
Vol 8 (2) ◽  
pp. 54-62 ◽  
Author(s):  
Bashir Muhammad ◽  
Sher Khan ◽  
Yunhong Xu
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Risk Analysis ◽  
Credit Risk ◽  
Commercial Banks ◽  
Management Practices ◽  
Emerging Market ◽  
Risk Identification ◽  
Risk Monitoring ◽  
Credit Risk Analysis

This study examines how risk management practices can be influenced by factors, including understanding risk management, risk assessment & analysis, risk identification, risk monitoring and credit risk analysis in commercial banks of Pakistan. The collected data satisfied the reliability requirement and regression and correlation analyses were adopted. The results suggest that understanding risk and risk management (URM), risk assessment and analysis (RAA), risk identification (RI), risk monitoring (RM) and credit risk analysis (CRA) have positive significant impact on risk management practices (RMP). This suggests that commercial banks in Pakistan need to pay attention to URM, RAA, RI, RM and RA. Moreover, RM and RAA are prominent variables which influence RMP; therefore commercial banks of Pakistan should focus on RM and RAA

Credit Risk Management of Commercial Banks in Nepal

2019 ◽  
Vol 4 (1) ◽  
pp. 27-37
Author(s):  
Shreya Pradhan ◽  
Ajay K. Shah
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Management Practices ◽  
Risk Mitigation ◽  
Mitigation Measures ◽  
Credit Risk Management ◽  
Loan Repayment ◽  
Credit Risk Assessment

The study is primarily focused on credit risk assessment practices in commercial banks on the basis of their internal efficiency, assessment of assets and borrower. The model of the study is based on the analysis of relationship between credit risk management practices, credit risk mitigation measures and obstacles and loan repayment. Based on a descriptive research approach the study has used survey-based primary data and performed a correlation analysis on them. It discovered that credit risk management practices and credit risk mitigation measures have a positive relationship with loan repayment, while obstacles faced by borrowers have no significant relationship with loan repayment. The study findings can provide good insights to commercial bank managers in analysing their model of credit risk management system, policies and practices, and in establishing a profitable and sustainable model for credit risk assessment, by setting a risk tolerance level and managing credit risks vis-a-vis the prevailing market competition.

scholarly journals Risk management practices in Egypt: A comparison study between Islamic and Conventional banks

2015 ◽  
Vol 5 (4) ◽  
pp. 257-270 ◽  
Author(s):  
Hassan M. Hafez
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Management Practices ◽  
Liquidity Risk ◽  
Risk Identification ◽  
Islamic Banks ◽  
Comparison Study ◽  
Risk Monitoring ◽  
Conventional Banks ◽  
Risk Assessment And Analysis

The purpose of this research is to examine the degree to which the Egyptian banks use risk management practices and techniques to eliminate associated risks to their business. Not only has that but also to compare between Islamic and conventional banked in terms of risk management practices. A standardized questionnaire was used to cover the main aspects of risk management: understanding risk, risk management, risk identification, risk assessment and analysis; risk monitoring and risk management practices and finally the types of risks faced by the two set of banks. The study found that the most challenging types of risks facing Islamic and conventional banks in Egypt are credit and liquidity risks. Conventional banks are more efficient in risk management and use more sophisticated techniques and practices. Liquidity risk is the most prominent and vital risk for Islamic Banks.

An Investigation of Credit Risk Management Strategies of Private Commercial Banks of Bangladesh

2014 ◽  
Vol 2 (2) ◽  
pp. 77-87
Author(s):  
Abu Hanifa Md. Noman ◽  
Md. Amzad Hossain ◽  
Sajeda Pervin
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Management Practices ◽  
Management Practice ◽  
Management Strategies ◽  
Third Party ◽  
Primary Data ◽  
Credit Risk Management ◽  
Risk Management Strategies

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 Keyword : Bangladesh; Commercial Bank; Credit risk; Credit risk management; Credit risk management strategies.

scholarly journals Improved forecast assessment for the expected credit losses in credit risk monitoring in commercial banks in the context of international and Russian practices

2020 ◽  
Vol 15 (3) ◽  
pp. 445-457
Author(s):  
Elena Vladimirovna Travkina ◽  
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Banking Sector ◽  
Assessment Model ◽  
Financial Instruments ◽  
Credit Risk Assessment ◽  
Ifrs 9 ◽  
Credit Losses

Current banking sector’s performance raises the issues connected with the IFRS 9 Financial Instruments driven transformation of the forecast assessment for the expected credit losses during monitoring and credit risk assessment in commercial banks. In this regard, it becomes important to conduct a comprehensive systematization of the existing Russian and international practices for monitoring and evaluating credit risk in commercial banks. The purpose of the study is to develop a comprehensive approach to the use of an effective model for the impairment of expected losses in banking activities. The novelty of the study includes the enhancement of the tools for the forecast assessment of the expected credit losses among the commercial banks’ clients to improve the credit risk management efficiency. The results from the implementation of IFRS 9 Financial Instruments in the banking area show that modern conditions maintain the uncertainty of the long-term impact of the credit risk on the commercial banks’ performance. What is more, a huge amount of additional information gives significant difficulties, which contributes into the sophisticated calculations of the future credit losses of the banks. It has been justified that a forecast assessment model for the expected credit losses of the clients during the monitoring and bank’s credit risk assessment should be based on the collective or individual ground. The efficient application of the expected losses impairment in the banking performance has been described as a fundamental tool to simulate the expected credit losses to provision for impairment. This model has been shown to be determined by the features of the credit activities and bank portfolio, types of its financial tools, sources of the available information, as well as the applied IT systems. The proposed model validation algorithm for the expected impairment losses could reduce the expected credit losses, decrease the volume of the created assessed reserves, as well as improve the overall commercial bank performance efficiency. Theoretically, the study develops the credit losses risk management in the context of the transformations in the global and Russian banking practices. From the perspective of the practical value, the research gives an opportunity to create an efficient forecast assessment model for the expected credit losses of the commercial banks’ clients, this model contributing into the cost effectiveness of the bank’s credit activities. A promising further research is considered to be aimed at developing the tools for the assessment of the commercial banks’ credit activity results in the context of the adopted changes connected with the introduction of IFRS 9 Financial Instruments in the Russian banking sector.

scholarly journals Relationship Between Risk Management Practices and Investment Decisions in Bank of Kigali, Rwanda

2020 ◽  
Vol 1 (1) ◽  
pp. 88-107
Author(s):  
Gedion Alang’o Omwono ◽  
Kayumba Annette
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Best Practice ◽  
Management Practices ◽  
Investment Decisions ◽  
Liquidity Risk ◽  
Market Risk ◽  
Risk Tolerance ◽  
Credit Risk Management ◽  
Risk Monitoring

The purpose of this study was to examine the relationship between risk management practices and investment decisions in Bank of Kigali, Rwanda. This study adopted correlational research design. Descriptive statistics include those of the mean, standard deviation and frequency distribution while inferential statistics involves use of spearman’s coefficient correlations. Linear regression was used where ANOVA was carried on each variable. The study found that there was a correlation between liquidity risk management, default risk management and market risk management with performance of the Banks. The study findings indicated that credit risk management (r=0.096, p<0.01), liquidity risk management (r=0.347, p<0.01), market risk management (r=0.506, p<0.01) and operational risk management (r=0.612, p<0.01) on financial performance. It however found that the Banks do not involve experts and consultants in market risk management thus recommendations were made for the Banks to revise their credit risk management policies, open up and share information with other players on market risk thus involve consultants more in their market risk management and to be more proactive than reactive in risk management. The study concluded that, risk management has a positive influence on the investment decisions and that risk monitoring can be used to make sure that risk management practices are in line with proper best practice risk monitoring policies which also helps bank management to discover exposures at early stages and make corrective actions. The study recommended that, Senior management should develop strategies, policies and practices to manage risk in accordance with the Banks risk tolerance and to ensure that the bank maintains sufficient liquidity risk cover.

scholarly journals THE EFFECT OF OPERATIONAL RISK MANAGEMENT PRACTICES ON THE FINANCIAL PERFORMANCE IN COMMERCIAL BANKS IN TANZANIA

2016 ◽  
Vol 1 (1) ◽  
pp. 29
Author(s):  
Kerongo Maatwa Meshack ◽  
Rose Wairimu Mwaura
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Financial Performance ◽  
Commercial Banks ◽  
Management Practices ◽  
Operational Risk ◽  
Operational Efficiency ◽  
Primary Data ◽  
Operational Risk Management ◽  
Insolvency Risk

Purpose: The purpose of the study was to determine the effect of operational risk management practices on the financial performance in commercial banks in TanzaniaMethodology: The research problem was studied by use of a descriptive research design. The population of the study consisted of all commercial banks in Tanzania. The study used the sample size of 34 commercial banks in Tanzania. Therefore all the commercial banks participated in equally. Questionnaires were the primary data collection tool in this study. The data gathered from the respondents shall be analyzed and presented using descriptive statistics.Results: The study found that the three independent variables in the study credit risk, Insolvency risk and Operational efficiency influenced the financial performance for the period under study. Credit risk Insolvency risk   and Operational efficiency influenced commercial banks financial performance for the period of study.Unique contribution to theory, practice and policy: This study therefore recommends that the commercial banks should handle their operations appropriately as the changes in the factors like Insolvency and Credit risk bring about an effect on the profitability of commercial banks hence affecting their financial performance

scholarly journals APPLIED RISK MANAGEMENT IN CONSTRUCTION INDUSTRY: A REVIEW

2020 ◽  
Vol 5 (3) ◽  
pp. 234-240
Author(s):  
Chaiwat Pooworakulchai
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Risk Analysis ◽  
Construction Industry ◽  
Master Planning ◽  
Construction Work ◽  
The Past ◽  
Risk Monitoring ◽  
Complex Manner

Risk management was applied to many organizations. There was a risk of multiple and complex manner in the construction industry, because it has a variety of elements. The application of risk management was therefore used in solving problems that suffer from the past to create an alternative to proper functioning under conditions. This article studied the main application to risk management in the construction industry by the sample texts document. The applying of risk management in the construction industry was 3 stages of risk management which were the risk analysis, risk assessment, risk control and follow-up, which was used to store information in the past and brainstorm by virtue of experience, expert tips and techniques to determine the risk analysis and risk evaluation of a mathematical methodology combined with the master planning of construction work to analyze, evaluate the risk under different condition and situations. Control, risk monitoring and risk assessment were a small amount so it should be a topic of research in future rely on notes and update the plan. The three important things for the applying of risk management in the construction industry were personnel, information and continuous learning.

The relationship between credit risk management and non-performing assets of commercial banks in India

2019 ◽  
Vol 45 (3) ◽  
pp. 399-412 ◽  
Author(s):  
Sirus Sharifi ◽  
Arunima Haldar ◽  
S.V.D. Nageswara Rao
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Management Practices ◽  
Primary Data ◽  
Credit Risk Management ◽  
Content Type ◽  
Indian Economy ◽  
Indian Banks ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of credit risk components on the performance of credit risk management and the growth in non-performing assets (NPAs) of commercial banks in India. Design/methodology/approach The data are obtained from primary and secondary sources. The primary data are collected by administering questionnaire among risk managers of Indian banks. The secondary data on NPAs of Indian banks are from annual reports and Prowess database compiled by the Centre for Monitoring Indian Economy. Multiple linear regression is used to estimate the models for the study. Findings The results suggest that the identification of credit risk significantly affects the credit risk performance. The results are robust as credit risk identification is negatively related to annual growth in NPAs or loans. There is evidence in support of a priori expectation of better credit risk performance of private banks compared to that of government banks. Practical implications The study has implications for Indian banks suffering from a high level of losses due to bad loans. In addition, it will have implications for the implementation of new Basel Accord norms (Basel III) by the Reserve Bank of India. Social implications The high and rising level of NPAs will have adverse consequences for credit flow in the economy in the absence of appropriate intervention by government and central bank in the form of changes in institutional and regulatory infrastructure. The problems in banking and financial services sector will lead to lower industrial and aggregate economic growth, and lower (or negative) growth in employment. Originality/value There is little evidence on credit risk management practices of Indian banks, and its relationship with credit risk performance and NPA growth. The need for an effective risk management system to manage credit risk assumes importance and urgency in the context of high and rising NPAs of Indian banks, and the consequences for the Indian economy.

Electricity Infrastructure Technical Security

2020 ◽  
pp. 1-30
Author(s):  
Martin Hromada ◽  
David Rehak ◽  
Neil Walker
Keyword(s):  
Complex System ◽  
Risk Assessment ◽  
Risk Management ◽  
Risk Analysis ◽  
Best Practices ◽  
Risk Identification ◽  
Security Measures ◽  
Identification Methods ◽  
General Energy ◽  
Electricity Infrastructure

In general, energy infrastructure is a basic but very complex system of elements, interconnections, functional inputs and outputs, which creates the need to break down subsystems, systems, and infrastructure areas. The aim of this chapter is therefore to discuss the possible implementation of approaches to risk assessment and risk management in relation to the application of technical security measures. This chapter of the book will therefore discuss risk analysis methods where the transition from general approaches to risk analysis, through risk identification methods and procedures and the assessment of major industrial and technological risks, to specific risk analysis methodologies for electricity infrastructures, will be presented. An important part of the chapter is also the introduction of practical approaches and methodologies that are accepted as “best practices” in connection with ensuring the technical security of electricity infrastructures.

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