| dc.description.abstract | The banking industry is a cornerstone of economic development in any country, and Bangladesh is no exception. Efficient financial services provided by a robust banking sector are integral to fostering economic growth. A key element in ensuring the stability and profitability of banks is effective credit management. Credit risk, a significant factor affecting financial outcomes, is inherent in banking activities, necessitating prudent risk management practices.
This report emphasizes the crucial role of credit risk management in Bangladesh's banking sector. The effective management of credit risk is vital not only for the financial well-being of banks but also for better serving clients. Credit risk is associated with the likelihood of individuals repaying loans and meeting installment requirements, making it imperative for banks to assess and mitigate these risks.
Banks employ credit risk management strategies to maintain a balanced credit risk portfolio. This involves evaluating an individual's financial background and assigning a credit score to determine loan eligibility. In the aftermath of the global financial crisis, minimizing loan losses has become a central focus for banks, leading to a heightened emphasis on credit risk management.
As financial institutions inherently focused on security, banks in Bangladesh prioritize credit risk management in their day-to-day operations. The Bangladesh Bank, as the central regulatory authority, collaborates with audit boards to ensure the soundness of individual banks' services and overall management records. This collaborative effort enhances transparency and accountability within the banking sector.
In conclusion, effective credit risk management is a linchpin for the stability and growth of Bangladesh's banking industry. By adopting prudent credit risk management practices, banks not only safeguard their financial health but also contribute to the overall economic development of the country. This report underscores the significance of ongoing collaboration between regulatory bodies and individual banks to maintain the integrity and security of the banking sector in Bangladesh. | en_US |
