Credit risk management of commercial banks in Nepal

Abstract

This study has completed research on topic credit risk management of commercial banks in Nepal with the objectives of to examine the credit risk position of the selected commercial banks in Nepal, determine the credit risk management, measurement system and practices used in sample banks, assess the association between credit risks with capital adequacy, non-performing loan, credit deposit ratio and loan loss provision of sample banks and evaluate the impact of adequacy, non-performing loan, credit deposit ratio and loan loss provision on credit risk of sample banks which is completed under the causal comparative research design taking 5 sample banks out of 20 commercial banks and sampling techniques is random sampling tools to select banks. There was quantitative nature of data from the published sources, where data analysis through the descriptive, correlation and regression model. Results provide additional support, revealing statistical significance for the overall model with an F-statistic of 6.83 and a pvalue of 0.029, surpassing the conventional significance level of 0.05. The collective impact of the predictors is deemed significant in elucidating the variance in the dependent variable.

Key Words: Credit Risk Amount, Credit deposit ratio, Non-performing loan ratio, Capital adequacy ratio and Management quality ratio