PROBLEMS AND OBSTACLES IN CREDIT RISK MANAGEMENT IN INDIAN PUBLIC SECTOR BANKS

• Main Authors: RENU ARORA, ARCHANA SINGH
• Format: Article
• Language: English
• Published: University of Petrosani 2014-10-01
• Series: Annals of the University of Petrosani: Economics
• Subjects: Credit Appraisal; Obstacles in Risk Management; CRM Practices
• Online Access: http://www.upet.ro/annals/economics/pdf/2014/part1/Z.%20Arora-Singh.pdf

This paper evaluates the credit risk management (CRM) practices of Indian public sector banks in grant of commercial loans to find the grey areas which need review and restructuring to improve banks’ asset quality. Based on literature review, a conceptual model of credit risk management systems for commercial loans, of Indian public sector banks, has been developed. This model has been used to underline the problems areas and obstacles in credit risk management through comparison of large and small banks. The empirical comparison of CRM practices of Indian public sector banks has resulted into emergence of various grey areas, like insufficient training, data management, inappropriate IT support, system disintegration, inconsistent rating approaches, which need immediate attention and if tackled properly, can reduce their non-performing assets.