Implementation and effectiveness of the internal credit risk rating in the banking industry: a study on Dhaka Bank Limited

Abstract

The report focuses on the Internal Credit Risk Rating, which is currently in use for assessing the credit risk for all the financial institutions as per Bangladesh Bank. The aim of the report is to identify the implementation process of ICRR System, comparison between the previous assessment models and challenges faced by Dhaka Bank Limited. The outcome of the report was that the ICRR System was a result of the development of the economy of Bangladesh which made the credit assessment more complex for financial institution, therefore the ICRR System considered more factors compared to the any of the past frameworks such as Lending Risk Analysis and Credit Risk Grading. Moreover, the report also consisted of in-depth research into the challenges faced by Dhaka Banks’ employees such as the adaptation of the new credit assessment tool and overcoming its challenges with possible recommendations for further improvements.