CREDIT MANAGEMENT OF COMMERCIAL BANKS IN NEPAL

Abstract

The study deals with credit risk management of commercial banks in Nepal. The study has the major objective is to assess the practice of credit management at NBL, RBBL and ADBL. The study has been conducted having three samples such as government owned banks out of total 20 commercial banks as of 4th February 2024. The samples have been chosen on the basis of government owned three banks by nature. The total number of observations is thirty having three sample banks with ten years data ranging from 2070/71- 2079/80. As per research design descriptive research design have been employed. The statistical tools consist of mean, standard deviation and CV as well as the inferential statistic consists of mainly correlation and regression analysis for cause and effect relationship between and among undertaken variables such as dependent i.e. profitability in terms of return on assets (ROA) and return on equity (ROE) and independent variables such as credit deposit ratio, interest income ratio, non-performing loan ratio, loan and advance ratio and loan loss provisions ratio. This study reveals that ADBL seems to be strong to mobilize its total deposit as loan and advances than other banks. . Return on equity of RBBL is high showing RBBL has sufficiently used existing capital. Debt to total assets ratio and loan losses to total loans ratio of ADBL is higher than RBBL and NBL which shows, ADBL uses more leverage in its capital structure compared to total capital.