Comparative Study on Credit Monitoring Practices in Slected Banks of Nepal

2017 ◽  
Vol 1 (1) ◽  
pp. 14-25
Author(s):  
Fatta Bahadur K.C ◽  
Indra Kumar Kattel
Keyword(s):  
Private Sector ◽  
Commercial Banks ◽  
Default Risk ◽  
Positive Relationship ◽  
Joint Venture ◽  
Risk Identification ◽  
Processing Procedure ◽  
Monitoring Practice ◽  
Risk Reporting

Credit monitoring is performed by the banks as post approval activities for existing credit clients to indentify the early warning single of credit risk. So that, the study was accomplish to observe the credit monitoring practice in Nepalese commercial banks.  The study was based on a sample of 10 commercial banks, comprising 5 private sector banks and 5 joint venture banks.  This paper attempts to determine the awareness of Nepalese bankers about the significance of credit monitoring as risk identification tools. The result of the study indicates that the periodically review of the security documents, credit processing procedure, compliance of covenants setup during credit approval, technique to control default, risk reporting, review of loan account and regular follow-up  were differently used as credit monitoring practice in  private sector and joint venture  banks in Nepal. These factors also found significant predictor for credit monitoring. Moreover, there was a positive relationship between credit monitoring practice and its factors instead of technique to control default.Credit monitoring is performed by the banks as post approval activities for existing credit clients to indentify the early warning single of credit risk. So that, the study was accomplish to observe the credit monitoring practice in Nepalese commercial banks.  The study was based on a sample of 10 commercial banks, comprising 5 private sector banks and 5 joint venture banks.  This paper attempts to determine the awareness of Nepalese bankers about the significance of credit monitoring as risk identification tools. The result of the study indicates that the periodically review of the security documents, credit processing procedure, compliance of covenants setup during credit approval, technique to control default, risk reporting, review of loan account and regular follow-up  were differently used as credit monitoring practice in  private sector and joint venture  banks in Nepal. These factors also found significant predictor for credit monitoring. Moreover, there was a positive relationship between credit monitoring practice and its factors instead of technique to control default.

scholarly journals Study of Credit Risk Identification Techniques Followed by Commercial Banks in Nepal

2017 ◽  
Vol 2 (2) ◽  
pp. 1-17
Author(s):  
Indra Kumar Kattel
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Joint Venture ◽  
Swot Analysis ◽  
Risk Identification ◽  
Risk Level ◽  
Private Bank ◽  
Significant Difference ◽  
Identification Techniques ◽  
Tools And Techniques

 The main purpose of this study is to explore the current credit risk identification techniques used by Nepalese commercial banks. A questionnaire was developed and surveyed to 9 commercial banks operating in Nepal. This paper attempts to ascertain the perceptions of Nepalese bankers about the importance of credit identification techniques and the practice of various tools to identify the risk related with the borrowers. The result of the study indicates that the Nepalese bankers are aware of the importance of various techniques to effectively identify the risk level. Furthermore, the Nepalese commercial banks have used various techniques like interview, root cause effect, check list analysis, Strength, Weakness, Opportunity and Threat (SWOT) analysis, scenario analysis, expert judgment, simulation, stress testing etc. In addition, there was significant difference between all three categories of bank, namely State-Owned bank with Private Bank, State-Owned bank with Joint Venture Bank, and Joint Venture Bank with Private Bank in terms of tools and techniques used for credit risk identification.

Comparative Analysis on the Sources of Credit Risk in Nepalese Commercial Banks

2017 ◽  
Vol 1 (1) ◽  
pp. 17-27
Author(s):  
Fatta Bahadur K.C ◽  
Indra Kumar Kattel
Keyword(s):  
Comparative Analysis ◽  
Private Sector ◽  
Credit Risk ◽  
Industrial Relation ◽  
Commercial Banks ◽  
Positive Relationship ◽  
Banking Sector ◽  
Business Environment ◽  
Risk Sources

The study was conducted to find out the significant differences between state-owned bank and private sector bank in the practice of measuring the sources of credit risk. This paper attempts to ascertain the perceptions of Nepalese bankers about the importance of identification practice of credit risk sources within the specific borrowers. The result of the study indicates that the collaterals, characters, capacity, capital, condition, legality of the business, economy of the country, business environment and industrial relation were consider as a sources of credit risk in Nepalese banking sector. The result shows that level of the credit risk sources were disparity the Nepalese commercial banks. In addition, Collaterals provided as a security by the borrower, characters of the borrower, capacity, legality of the business, economy of the country and industrial relation were found significant predictor for the sources of credit risk. Moreover, there was a positive relationship between identification practice and sources of credit risk.

scholarly journals Evaluating the Financial Solvency of Selected Commercial Banks of Nepal: An Application of Bankometer

2015 ◽  
Vol 1 (1) ◽  
pp. 88-95 ◽  
Author(s):  
Indra Kumar Kattel
Keyword(s):  
Private Sector ◽  
Commercial Banks ◽  
Banking Sector ◽  
Joint Venture ◽  
Banking Industry ◽  
Academic Research ◽  
Financial Service ◽  
Insolvency Risk ◽  
Financial Position ◽  
Financial Soundness

Banking industry of Nepal is moving towards the goal of integrated financial service because of competition, frequently changes in technology, and customers' expectations. Financial system is reflected through sound solvency position in the banking sector. Therefore, the aim of this study is to evaluate the financial soundness of joint venture banks and private sector banks in Nepal by using bankometer model for the period covering 2007- 2012. The bankometer model was used developed according to International Monetary Fund guidelines. The study has found that all the private and joint venture banks are in sound financial position. The finding of the study reveals that private sector banks are financially sounder in comparison to joint venture banks. The study concludes that bankometer model will help the bank's internal management to mitigate the insolvency risk within proper control and supervision at the operational level.Journal of Advanced Academic Research Vol.1(1) 2014: 88-95

scholarly journals The Impact of Financial Deepening on Economic Growth in Nigeria (1981-2018)

2020 ◽  
Vol 17 ◽  
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Interest Rates ◽  
Money Supply ◽  
Commercial Banks ◽  
Financial Sector ◽  
Financial Deepening ◽  
Growth Data ◽  
Main Research ◽  
The Impact

Different academics and experts have acknowledged that developing the financial sector positively impacts economic growth by increasing productivity, progress and national investment. Expanding the financial sector allows financial intermediaries to carry out functionalities of deploying, aggregating and directing a country’s savings into an investment which contributes to domestic progression. This research explores the effect of financial deepening on Nigeria’s growth for 38 years covering 1981- 2018. The main research goals were to investigate the linkages among time and savings deposit of commercial banks, money supply and credit to the private sector on the economy’s growth. Data was obtained from CBN Bulletin different issues and analyzed using Autoregressive Distributed Lag. From the result of analysis, we found out that long run relationship existed but no regressor was found to be significant. Credit to the private sector to GDP was inversely related to GDP growth whereas money supply to GDP had positive relations with economic growth rate, time and savings deposits in commercial banks negatively affected national growth. Policies favoring credit lending to the private sector should be encouraged by stakeholders in the economy, for instance, higher savings interest rates would encourage more savings. More importantly, policies should be enacted to make sure that savings are transmitted into productive investments that can yield financial deepness

scholarly journals Benchmarking and Rating of Private Commercial Banks of Bangladesh Through CAMELS Components

2020 ◽  
Vol 2 (2) ◽  
pp. 40-49
Author(s):  
A H M Ziaul Haq ◽  
Hosnay Nasrin
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking Sector ◽  
Study Data ◽  
Annual Reports ◽  
Continuous Performance ◽  
Financial Failure ◽  
Strong Position ◽  
Composite Rating

The banking sector of Bangladesh is becoming more complicated than before. Ensuring the financial stability of the economy, monitoring, supervision, and continuous performance evaluation of the banking sector are compulsory. The present study, therefore, is an attempt to evaluate and compare the performance of our banks. One of the most effective supervisory techniques, CAMELS rating system has been used to benchmark and rate the banks based on their performance. In this study, 21 private commercial banks (PCBs) have been chosen as samples to meet the purpose of the study. Data for analysis has been collected from the banks’ annual reports for the period of 2008 to 2018. The result shows that none of the banks could achieve a 'strong' position, and only SEBL was able to secure a ‘satisfactory’ mark. Unfortunately, AB bank was rated "marginal" in the composite rating, which is the lowest rating among the sample banks. Hence, AB bank needs to develop reform and follow-up programs as soon as possible to avoid financial failure.

scholarly journals The Effect Of Intellectual Capital On The Financial Performance Of Libyan Banks

2020 ◽  
Vol 5 (4) ◽  
Author(s):  
Khalad M. S. Alrafadi
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Commercial Banks ◽  
Positive Relationship ◽  
Value Added ◽  
Organizational Structures ◽  
Private Banks ◽  
The Impact

This study examines intellectual capital (IC) performance of Libyan banks during the period from 2004 to 2010, using value-added intellectual coefficient (VAIC) methodology, and investigates the impact of IC on financial performance. It identifies the IC components that may be the drivers of the traditional indicators of bank success. The results of the study showed that private banks are more concerned with the components of intellectual capital compared to commercial banks and specialized banks. The results also showed that there is a positive relationship between the components of the (VAIC) and the (ROA). The study recommended that Libyan banks should add a post or position to manage intellectual capital in their organizational structures to help structure relevant strategies and policies on how to obtain, utilize and develop the best resources required for intellectual capital.  

Financial Performance Analysis of Nepalese Financial Institutions in the Framework of CAMEL

2020 ◽  
Vol 9 (1) ◽  
pp. 56-74
Author(s):  
Kedar Raj Gautam
Keyword(s):  
Financial Performance ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Capital Adequacy ◽  
Significant Positive Relationship ◽  
Management Efficiency ◽  
Significant Negative Relationship ◽  
Development Banks

Analysis of financial performance to detect financial health of finance companies, development banks and commercial banks as a whole is a less explored research in Nepalese context. This paper, therefore, attempts to examine the financial performance and factors influencing financial performance of Nepalese financial depositary institutions in the framework of CAMEL. This study is based on descriptive cum casual research design. This study is based on secondary data which was extracted from various publications published by Nepal Rastra Bank such as banking and financial statistics, financial stability report and bank supervision report. All commercial banks, development banks, and finance companies are taken as population of the study. The study deals with financial performance analysis of entire population covering five years from 2014/15 to 2018/19. The variables such as capital adequacy, assets quality, management efficiency, earnings and liquidity are used to analyze financial performance. Descriptive as well as pooled regression analysis was used to assess the relationship among the variables. Descriptive analysis shows that financial institutions in each category meet NRB standard regarding capital adequacy. On the basis of capital adequacy and earnings, finance companies stand at first, on the basis of assets quality, development banks stand at first and on the basis of management efficiency, commercial banks stand at first. Finance companies store high liquidity as compared to other class financial institutions. The regression analysis shows that return on assets, ROA has significant positive relationship with capital adequacy and ROE but ROA has significant negative relationship with assets quality. However, return on equity, ROE has significant positive relationship with assets quality and ROA but ROE has significant negative relationship with capital adequacy. Capital adequacy and assets quality play major role to maximize ROA and ROE of financial institutions.

Spillovers of Sovereign Default Risk: How Much is the Private Sector Affected?

2011 ◽  
pp. 33-41 ◽  
Author(s):  
Udaibir S. Das ◽  
Michael G. Papaioannou ◽  
Christoph Trebesch
Keyword(s):  
Private Sector ◽  
Default Risk ◽  
Sovereign Default ◽  
Sovereign Default Risk
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