Problems and obstacles in credit risk management in indian public sector banks

Renu Arora () and Archana Singh ()
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Renu Arora: University of Delhi, India
Archana Singh: Delhi Technological University, India

Annals of the University of Petrosani, Economics, 2014, vol. 14, issue 1, 353-362

Abstract: This paper evaluates the credit risk management (CRM) practices of Indian public sector banks in grant of commercial loans to find the grey areas which need review and restructuring to improve banks’ asset quality. Based on literature review, a conceptual model of credit risk management systems for commercial loans, of Indian public sector banks, has been developed. This model has been used to underline the problems areas and obstacles in credit risk management through comparison of large and small banks. The empirical comparison of CRM practices of Indian public sector banks has resulted into emergence of various grey areas, like insufficient training, data management, inappropriate IT support, system disintegration, inconsistent rating approaches, which need immediate attention and if tackled properly, can reduce their non-performing assets.

Keywords: credit appraisal; obstacles in risk management; CRM practices (search for similar items in EconPapers)
JEL-codes: G02 G12 G21 G32 (search for similar items in EconPapers)
Date: 2014
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