An overview on credit risk management of Prime Bank Limited

Abstract

Prime Bank Limited (PBL) is one of the most renowned banks in Bangladesh. It was established in 17th April 1995. It has been one of the dominating banks from the very beginning of the commercial banks. It has contributed a lot in Bangladesh’s economy. The topic of my internship report is “An Overview on Credit Risk Management of Prime bank limited”. It has achieved the latest highlighted feature in the banking industry of Bangladesh. There is a huge competition in the banking industry between the commercial and Gov. Banks in Bangladesh, which is the reason that Credit Risk Management has gained an extensive attention. The main focus of my report was to understand the activities take place in An Overview on Credit Risk Management of “Prime Bank Limited”. This report primarily focuses on the overall financial indicators of “Prime bank Limited” and their performance in this overall commercial banking industry in Bangladesh. Different issues like their management, financial strength, credit and collection policies and their crisis, management stands are described in this report. I tried to describe the steps “Prime bank Limited” follows to maintain this issues of Credit Risk. It also includes the Credit facilities PBL provides for their customers. This report covers the facilities under MSME, RETAIL and CORPORATE units. But I have mainly focused on the Retail Loans of “Prime Bank Limited” due to the limitation of the research. I have focused on the facilities of retail loan like Personal loan, Home Loan, Secured Loan, Credit card, Auto loan etc. Here I have showed their retail loan’s performance, total outstanding loan amount, total Non-performing Loan (NPL) Amount and segmented loan performance of Prime Bank’s retail department. As a general there is a minimum amount of credit risk for most of the customers, so I have tried to find out what types of credit risk issues PBL face and how they manage this credit risk issues of the customers. I have also tried to compare the loan performance, total outstanding loans and Non-Performing Loan amount of “Prime bank Limited” with “City Bank” so that the current position of “Prime Bank Limited” can be understood and they can take several steps to grow their economy more. After discussing these components, I have found out some findings and challenges PBL faces while they manage the credit risk of their customers. In the finding part I found that they are facing problems like inflexible credit assessment and risk categorizing, ineffective Third Party agent (CPV agents), inefficient data management and some other things which are affecting PBL’s Credit Risk Management. Lastly, I tried to make some recommendations for the bank based on my findings and challenges they face. The credit risk can be managed efficiently if these recommendations are followed and the challenges are converted into opportunity by “Prime Bank limited”