CREDIT RISK MANAGEMENT IN STATE BANK OF INDIA

Presented by :PRATIK BHATNAGAR

Objectives of Project

To study the complete history of State Bank Of India. To study the clear meaning of credit risk management. Studying the credit policy adopted and comparative analysis of Public sector and Private sector.

Company Profile

State Bank Of India (SBI) is the largest bank in India. If one measures by the number of branch offices and employees, SBI is the largest bank in the world. SBI provides various domestic, international and NRI products and services through its vast network in India and overseas. Their mission is to retain the bank position as premiere Indian Financial Service Group and to play a leading role in expanding and diversifying financial service sectors.

Meaning of Credit Risk

Credit risk is defined as the potential that a bank borrower or counterparty will fail to meet their obligation in accordance with agreed terms. It is also defined as the risk that a firm customer and the parties to which it has lent money will fail to make promised payments is know as credit risk.

Key Element Of Credit Risk Management

Establishing appropriate credit risk environment. Operating under sound credit granting process.

Maintaining an appropriate credit administration, measurement & monitoring.

Ensuring adequate control over credit risk.

Data Collection Method

Primary Data: It has been collected through personal interview by direct contact method. Secondary Data: It is collected from the magazines, annual reports, internet.

Facts & Finding

SBI is granting credit in all sectors in an equated monthly installments so that anybody can borrow money easily. As compared total advances of SBI is increased year by year. Project findings reveal that SBI is lending more credit or sanctioning more loans as compared to other banks.

Credit risk management process of SBI is very effective as compared with other banks.

Conclusion

The project undertaken has helped a lot in gaining knowledge of credit policy and credit risk management in Nationalized Bank with special reference to SBI. Credit policy of the bank provides the frame work to determine (a) whether or not to extend credit to a customer and (b) how much credit to extend.

Credit policy and credit risk policy of the bank has become very vital in the smooth operation of the banking activities.

Recommendations

The bank should keep on revising its credit policy which will help bank efforts to correct the course of the policies. Bank has to grant loans for the establishment of the business at a moderate rate of interest. Bank should not issue entire amount of loan to agriculture sector at a time, it should release the loan in installments. SBI has to reduce the interest rate.

Thank You