Evaluation of credit assessment & risk grading management of Dutch-Bangla Bank Limited

Abstract

This paper has attempted to highlight on an evaluation process of Credit Assessment and Credit Risk Grading (CRG) in the context of Dutch Bangla Bank Limited. It leads in the financial institute market among the privatized commercial banks of the country as well as in the entire banking industry. The diversified products of the bank have been focused on the daily life financial needs of the people irrespective to the economic classes. In the light of the assignment the present study has gone through the process involved in lending in different levels and in different modes. Lending is one of the principal functions of the bank as usual which is part and parcel of public money deposited to the Bank. Thus Banks are obviously obligated to manage the risks and to ensure the repayment of the lent money. Sound lending practices therefore, are very important for the trustworthiness, profitability and success of a bank. For the sake of sound lending, it is necessary to develop a sound credit policy and modern credit management techniques equipped with adequate logistic support to ensure that loan/advances are safe and the money will come back within the time set for repayment. For this purpose, proper and prior analysis of credit proposal is required to assess the risk. Credit risk analysis is one of the basic tools of risk management and control, as it identifies the risk factors inherent in lending process of the banks and as quality credit operation deserves critical analysis. For the effective application of CRA, efficient IT based operational software, expertise and proper monitoring of the management. Moreover, willingness and motivation of the concerned individuals are needed. By removing the road block of CRM and CRG implication through the recommendations mentioned in this paper Dutch Bangla Bank Limited can open a new horizon to better assess the risks for lending bankers and will bring the accountability in financial sector.