Comparative Analysis on the Sources of Credit Risk in Nepalese Commercial Banks

Fatta Bahadur K.C; Indra Kumar Kattel

doi:10.46281/asfbr.v1i1.2

Fatta Bahadur K.C Tribhuvan University, Nepal
Indra Kumar Kattel Mewar University, Rajasthan, India

DOI: https://doi.org/10.46281/asfbr.v1i1.2

Keywords: Credit, Risk, Identification, Collaterals, Characters, Capacity, Capital, Condition, Legality, Economy

Abstract

The study was conducted to find out the significant differences between state-owned bank and private sector bank in the practice of measuring the sources of credit risk. This paper attempts to ascertain the perceptions of Nepalese bankers about the importance of identification practice of credit risk sources within the specific borrowers. The result of the study indicates that the collaterals, characters, capacity, capital, condition, legality of the business, economy of the country, business environment and industrial relation were consider as a sources of credit risk in Nepalese banking sector. The result shows that level of the credit risk sources were disparity the Nepalese commercial banks. In addition, Collaterals provided as a security by the borrower, characters of the borrower, capacity, legality of the business, economy of the country and industrial relation were found significant predictor for the sources of credit risk. Moreover, there was a positive relationship between identification practice and sources of credit risk.

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