Credit Risk Management of Uttara Bank Limited : A Study on Postagola Branch
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Uttara bank is one of the largest and oldest private-sector commercial bank in Bangladesh with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensures efficient service to clients. Uttara bank limited had been a nationalized bank in the name of Uttara Bank under the Bangladesh Bank. Commercial banks lend money to different categories of borrowers for various purposes with a view to generate revenue. Accordingly, while processing and appraising a loan proposal, banks essentially analyze the information relating to borrowers, assess the purposes of loan and determine the viability of the loan proposal. If the proposal is sound and safe for lending, loan is sanctioned and disbursed Thispaper analyses the impact of Credit Risk Management of Uttara bank including various types of credit disbursed by UBL, the process of credit management practice of UBL and credit disbursement process of UBL on company’s performance. To analyze the effectiveness of their credit risk management practices and process data sources gathered from primary data sources including practical banking work, personal discussion with the officers and executives of UBL and personal interview with customer and from secondary data sources including annual report, published booklet, various published document, website, text book, circular etc. This report has several chapters and different aspects regarding the topic have been discussed in each chapter. I conduct hypothesis testing in the important criteria of credit risk management and justify those subjective judgments on the basis of quantitative analysis to analyze the effectiveness of their credit risk management practices and policies. I also examine some important ratio of credit risk and analyze their current situation based on profitability, profit margin and market share and ROI. Quantitative analysis reveals that UBL go through rigid credit risk management to manage their credit risk though they still need to improve on some areas such as relying more on debt may affect their liquidity and solvency and eventually affect credit risk. Bank must have sophisticated information system and analytical techniques that enable management to measure the credit risk andBank should take into consideration potential future changes in economic conditions when assessing individual credits and their credit portfolios, and should assess their credit risk exposures under stressful conditions.
- Journal of law