Evaluating the Credit Risk Management Framework of Public and Private Sector Banks in India: A Comparative Study

The IUP Journal of Bank Management, Vol. XIII, No. 3, August 2014, pp. 57-66

Posted: 3 Jul 2015

See all articles by Anju Arora

Anju Arora

Keshav Mahavidyalaya

Muneesh Kumar

Department of Financial Studies, University of Delhi

Date Written: July 2, 2015

Abstract

Professional management and sincere efforts towards upgrading Credit Risk Management (CRM) framework have gained reasonable pace in both the public and private sector banks alike. The present study, first of its kind, attempts to find the difference in the strength of overall CRM framework of private and public sector banks in India in quantitative terms and also identifies the specific CRM elements leading to such differences in their respective frameworks, if any. A mathematical evaluation tool, namely, CRM Index Score, comprising quantitative assessment of the current set of CRM practices relating to organization, policy and strategy, operations and systems at transaction level and operations and systems at portfolio level, the four basic elements of CRM framework, were deployed for making a comparative evaluation. The findings revealed that the strength of the overall CRM framework did not vary significantly between public and private sector banks as on the whole there existed very little difference in the scores of the public and private sector banks.

Suggested Citation

Arora, Anju and Kumar, Muneesh, Evaluating the Credit Risk Management Framework of Public and Private Sector Banks in India: A Comparative Study (July 2, 2015). The IUP Journal of Bank Management, Vol. XIII, No. 3, August 2014, pp. 57-66, Available at SSRN: https://ssrn.com/abstract=2625978

Anju Arora (Contact Author)

Keshav Mahavidyalaya ( email )

North Campus
Delhi
India

Muneesh Kumar

Department of Financial Studies, University of Delhi ( email )

South Campus, Benito Juarez Road
Delhi, New Delhi 110021
India

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