Authors: Sweety Ratnakar Dhole, Dr. Ujwala Narkhede
Abstract: Credit risk remains one of the most significant risks faced by commercial banks and plays a critical role in determining their financial stability and performance. This study evaluates the effectiveness of credit risk management practices in commercial banks through a comparative analysis of selected institutions. The research examines key components of credit risk management, including credit appraisal procedures, risk identification and measurement techniques, credit monitoring systems, and loan recovery mechanisms. Both quantitative and qualitative data are utilized, drawing from financial statements, regulatory reports, and structured interviews with bank officials. Financial indicators such as non-performing loan ratios, capital adequacy, and profitability measures are analyzed to assess the relationship between credit risk management practices and bank performance. The findings reveal notable differences in the effectiveness of credit risk management across banks, largely influenced by the strength of internal controls, adherence to regulatory guidelines, and the adoption of advanced risk assessment tools. The study concludes that robust and proactive credit risk management practices significantly enhance asset quality and financial performance. The results provide valuable insights for bank management, regulators, and policymakers in strengthening credit risk frameworks to ensure sustainable banking operations.
