Credit Risk Management of Bank of Baroda.

1. THE STUDY OF CREDIT RISK MANAGEMENT
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
Master of Management Studies
(University of Mumbai)
2020-2022
MR. VISHAL VIJAY DOKE
ROLL NUMBER - P11
Under the guidance of
PROF. SANGRAM JAGTAP
SUBMITTED TO:
DR. V. N. BEDEKAR INSTITUTE OF MANAGEMENT STUDIES, THANE

2. DECLARATION BY THE CANDIDATE
This is to certify project report entitled THE STUDY OF CREDIT RISK
MANAGEMENT which is submitted by me in partial fulfillment of the
requirement for the award of Master of Management Studies,(University of
Mumbai) Dr. V. N. Bedekar Institute of Management Studies, comprises of my
original work and due acknowledgment has been made in the text to all other
material used.
Wherever references have been made to intellectual properties of any
individual / Institution / Government / Private / Public Bodies / Universities,
research paper, text books, referencebooks, research monographs, archives of
newspapers, corporate, individuals, business / Government and any other
source of intellectual properties viz., speeches, quotations, conference
proceedings, extracts fromthewebsite, working paper, seminalwork etal, they
have been clearly indicated, duly acknowledged and included in the
Bibliography.
____________________________________
Date & Signature of Candidate

3. CERTIFICATE BY THE GUIDE
This is to certify that project report entitled ……………………………….
which is submitted by ………………………… in partial fulfillment of the
requirement for the award of Master of Management Studies,
(University of Mumbai) Dr. V .N. Bedekar Institute of Management
Studies, is a record of the candidate's own work carried out by him
under my guidance. The matter embodied in this report is original and
due acknowledgment has been made in the text to all other material
used.
Authorized Signatory:
Date:

4. CERTIFICATE BY THE ORGANIZATION
The recruiting organizations may use the following format for giving the
letter of completion of project.
This is to certify that candidate …………………………………. has worked for a tenure
of _________________ with our organization. Hehas undertaken the project
entitled ___________________ under the supervision of
_______________________.
AuthorizedSignature andSeal of the Company:
Date:

5. ACKNOWLEDGEMENT
I deem it a privilege to thank our Director, Dr. Nitin Joshi, Director General Dr.
Guruprasad Murthy, for having given methe opportunity to do the project,
which has been a very valuable learning experience.
I am truly gratefulto my external guide ___________________ and my internal
research Guide, Professor Sangram Jagtap, for their research guidance,
encouragement, and opportunities provided.
I wish to thank all the respondents from thefirms who spent their valuable
time in discussing with me and giving valuable data by filling up the
questionnaire.
My sincereand heartfelt thanks to all my teachers at the Departmentof MBA,
Dr. V. N. Bedekar Instituteof Management Studies for their valuable support
and guidance. Last, but not least, I want to express my deep appreciation to my
parents & to my friends for their unstinted support.
Vishal Doke
P11
MMS SEM-2 Finance Student

6. EXECUTIVE SUMMARY
This projectis based on THE STUDYOF CREDITRISK MANAGEMENTin BANK OF
BARODA.
Study mainly focused on risk involved by Bank of Baroda by giving loans to
customers & when such loans which are assets to the banks become
nonperforming assets when customersfails to repay their loans.
Further this study helps us to understand CreditRisk Management Framework,
Mechanism, Credit Risk Strategies, and Analysis of financial data. This data is
gathered fromthe annualreports & financial performancereports of the Bank
of Baroda.

7. TABLE OF CONTENT
Sr. No. Title Page No.
Declaration by Candidate
Certificate by the Guide
Certificate by the Organization
Acknowledgement
Executive Summary
Chapter 1- Introduction
1.1 Introduction to Industry
1.1.1 Introduction to Banking Industry
1.1.2 Market size
1.1.3 Structure of Indian Banking System
1.2 Introduction to Bank of Baroda
Chapter 2- Conceptual Background & Study
2.1 Conceptual Background
2.2 Credit Risk Management
2.3 Pillars of Credit Risk Management
2.4 Board & Senior Management
2.5 Policies, Procedures & Limits
2.6 Measurement of Credit Risk
2.7 Internal Risk Rating
2.8 Administration of Credit
2.9 Audit & Internal Controlling
2.10 Non-Performing Assets
Chapter 3- Review of Literature
Chapter 4- Research Methodology
4.1 Statement of Problem
4.2 Need of the Study
4.3 Objectives of the Study
4.4 Scope of the Study
4.5 Research Methodology
4.6 Limitations of Study
Chapter 5- Data Analysis & Data Interpretation
Chapter 6 - Conclusion
6.1 Findings/ Recommendations
6.2 Conclusion
Bibliography

8. LIST OF TABLES
Table No. Particulars Page No.
5.1 Table showing Total Deposits of Bank of Baroda
5.2
Table showing Loans & advances in Bank of Baroda
5.3 Table showing Credit to Deposit Ratio in Bank of Baroda
5.4
Table showing Current Assets in Bank of Baroda
5.5 Table showing Current Ratio in Bank of Baroda
5.6
Table showing Industry wise Credit Portfolio of Bank of Baroda
5.7
Table showing Industry wise Outstanding Credit in Bank of
Baroda
5.8 Table showing Industry wise contribution to NPA (Gross)
5.9
Table showing Non-Performing Assets in Bank of Baroda
LIST OF GRAPHS
Graph No. Particulars Page No.
5.1 Analysis of Total Deposits of Bank of Baroda
5.2 Analysis of Loans & Advances in Bank of Baroda
5.3 Analysis of Credit to Deposit Ratio in Bank of Baroda
5.4 Analysis of Current Assets in Bank of Baroda
5.5 Analysis of Current Ratio in Bank of Baroda
5.6 Analysis of Credit Portfolio (Industry wise) in Bank of Baroda
5.7 Analysis of Outstanding Credit (industry wise) in Bank of Baroda
5.8
Graph showing Industry wise contribution to Non-Performing
Assets
5.9 Analysis of Non-Performing Assets in Bank of Baroda

9. CHAPTER-1
INTRODUCTION

10. 1.1 INTRODUCTION OF INDUSTRY:
1.1.1 Introduction to Banking Industry:
The word bank is derived from French word ‘BENQUE’ or the Italian word ‘BANCO’,
which referred as an office or the premises of monitory transaction over the counter.
Banking sector is lifeline of any modern economy. It is most important pillar of the financial
sector, which plays vital role in countries economy. Bank plays very important role in
mobilization of deposits & disbursement of credit to various sectors of the economy. Banking
sector meets financing requirements of trade, industry & agriculture with higher degree of
commitment & responsibility which is very significant for economic growth of the country.
In India, banking sector plays important role in socio-economic progress of the country.
Banking sector is very superior in India as more than half assets of the financial sector is
being hold by banking sector. The rapid transformation in the banking sector in India has
made the industry stronger, cleaner, transparent, efficient, faster, disciplined & more
competitive. Banking in India has been through a long journey. The banking sector in India
has a huge history, which covers traditional financial practices from the time of British
government to the reform period, nationalization to the privatization of the banks & now
increasing numbers of foreign banks in India.
Before establishment of banks Money lenders used to handle financial activities by charging
high interest rates with no security against savings & no uniformity in loan structure. So to
overcome this problem government established organized banks which were controlled by
government itself.
The first bank ever established was Bank of Hindustan (1770) & General Bank of India
(1786) which discontinued. Then under the charter of East India Company in 1806, the
largest & oldest (still in the existence) State Bank of India (SBI) originated in the Bank of
Calcutta which almost become Bank of Bengal. Along with SBI there were 2 banks Bank of
Bombay & Bank of Madras were also under the control of East India Company. In 1921 the 3
banks merged together forming Imperial Bank of India & became State Bank of India in
1995. It acted as apparently as central bank until in 1995 Reserve Bank of India (RBI)
established & acquired control on SBI.

11. As per the current scenario according to Reserve Bank of India (RBI), Indian banking sector
is sufficiently capitalized & well regulated. The financial & economic conditions in the
country are far superior to any other country in the world. The banking system in India has
potential to become the fifth largest banking industry in the world and third largest by the
year 2025 according to KPMG-CII report. Over the next decade by the efforts of RBI &
government of India, banking sector is estimated to create up to two million new jobs to
integrate financial services in rural areas.
According to reports in June 2024, Indian banking industry has recently witnessed the roll out
of innovative banking models like payments & small finance banks. The digital payments
system in India has evolved the most among 25 countries with India’s Immediate Payment
Service (IMPS) being the only system at level five in the Faster Payment Innovation Index
(FPPI).
The use of technology has brought revolutionary changes in the banking sector. With the help
of IT banking sector is able to provide better services & products customers are able to
utilize. The role of an IT in the banking sector can be divided in 2 parts namely
communication & connectivity, and individual/ business transactions. It enables banks to
offer better services to its customers in secure, reliable & affordable manner and sustain
competitive advantage.
1.1.2 Market Size:
As per the latest updates of June 2024, Indian banking system consists 12 public sector
banks, 22 private sector banks, 56 regional rural banks, 1,485 urban co-operative banks,
96,000 rural co-operative banks in addition to co-operative credit institutions, 46 foreign
banks. The numbers of Automated Teller Machines (ATM) IN India has been increased to
209282.
Total assets of Indian banking sector reported to be ₹ 3.1 trillion (US$2,523.49 Billion) in
FY20. During FY16-FY20, bank credit grew at a Compound Annual Growth Rate (CAGR)
of 3.57%. As of FY20, total credit extended surged to US$ 1,698.97 billion. During FY16-
FY20, deposits grew at a CAGR of 13.93% and reached US$ 1.93 trillion by FY20.
According to the RBI, bank credit and deposits stood at ₹ 108 trillion (US$ 1.5 trillion) and ₹
149.6 trillion (US$ 2.1 trillion), respectively, as of March 12, 2021.

12. 1.1.3 Structure of Indian Banking System:
Being apex bank of country Reserve Bank of India hold control & regulates all the banks in
India. This banks further classified as Scheduled Commercial Banks & Scheduled Co-
Operative Banks. Furtherly Scheduled Commercial Banks are classified into different types
of banks according to their nature and types of operation.
Reserve Bank of India: RBI is the central bank of the India. The RBI is supreme monetary
& banking authority & has the responsibility to control the banking system in the India. It
keeps reserves of all scheduled banks and hence known as ‘Reserve Bank’. It is owned by the
government & has the monopoly power of issuing notes.
I. Scheduled Banks: Scheduled banks are those banks which have been included in the
Second Schedule of Reserve Bank of India Act (1934).They can borrow money from RBI for
normal banking purpose.

13. i) Commercial Banks: Are required to be registered under Banking Regulations Act (1949).
This banks operates commercial principles in order to earn profits. Function of these banks
are accepting deposits from public & lending to industry & commerce. They are spread
across the country. There are 21 nationalized public sector banks. And classified into:
a) Public Sector Banks: Are banks where a majority stake (i.e. more than 50%) is held by a
government. Its shares are listed on stock exchange. There are total 21 PSB’s in India & State
Bank of India group. Public sector banks has high customers base because of high
geographical coverage & people also find government banks more trustworthy.
b) Regional Rural Banks: Regional Rural Banks were formed on Oct 2, 1975 upon the
recommendations of M. Narasimham Working Group during tenure of Indira Gandhi’s
government. The purpose of these banks is to serve primarily in the rural areas of India with
basic banking & financial services.
c) Private Sector Banks: Are banks where majority of stake is not held by government.
Private sector banks are owned & managed by private individual or private companies. They
have lesser consumer base as they take time to gain trust of their customers.
ii) Co-Operative Banks: Co-operative banks are required to be registered under the co-
operative Societies Act of the concerned state. Their operations are restricted in the state.
With the basis of their operations is service to its members & the society, these banks accepts
deposits from the members & the public for the purpose of providing loans to farmers &
small businessmen with a motto of service. Classified into:
a) State Co-operative Banks: These are small financial institutions governed by regulations
like Banking Regulations Act (1949) & Banking Laws Co-operative Societies Act (1965). At
present there are 33 State co-operative banks.
b) Central Co-operative Banks: also known as Urban Co-operative Banks (UCB). These
refers to primary co-operative banks located in urban & semi-urban areas.
c) Primary Credit Societies: also known as Primary Agricultural Credit Societies (PACS).
Such banks are basic units & smallest co-operative credit institutions in India.
II. Unscheduled Banks: Banks which are not scheduled under the Second Schedule of
Reserve Bank of India Act (1934) are known as ‘Unscheduled Bank’. In other words banks
with reserve capital less than ₹5 Lakhs qualify as unscheduled banks.

14. 1.2 INTRODUCTION OF BANK OF BARODA:
Bank of Baroda is (BOB) is an Indian government owned banking & financial services
company. It is 2nd largest bank in India, next to State Bank of India (SBI). Its headquarters is
in Vadodara (earlier known as Baroda), Bank has corporate office in Mumbai.
The bank was founded by the Maharaja of Baroda, Maharaja Sayajirao Gaekwad III on 20th
July 1908. The 1st branch was established at Mandvi in Baroda. In the year 1953 itself the
BOB set up its 1st overseas branch at Mombassa in Kenya. In the year 1957 BOB established
its operations in United Kingdom at London. On 19th July 1969, the bank along with the 13
other major commercial banks of India were nationalized by the Government of India & has
been designated as a profit making public sector undertaking.
Bank of Baroda has 8214 branches & 10033 ATMs (as per 2020) in all over the India. Bank
has 132 million customers with a total business of US$ 218 billion. It has total assets of
₹1202676 crore (US$170 billion). As it serves in India & worldwide too, Bank has global
presence of 100 overseas offices. It ranked 1145 on Forbes Global 2000 list as per 2019 data.
Bank of Baroda Logo: The logo is unique representation of symbol. Logo consist of dual
letters of B with orange shade with a universal symbol of Sun in it with white shade. The sun
is the representation for what bank stands for. As sun being the single most powerful source
of light & energy it reaches far reaching its rays disappearing darkness to light up everything
it touch. Similarly at Bank of Baroda, bank tries to seek the source to help all the stakeholders
realize & reach their goals. This sun is called as ‘Baroda Sun’. The Baroda Sun is symbol of
dynamism & optimism & perfect fitting face for brand.

15. Central Board of Directors:
Non-Executive Chairman : Dr. Hasmukh Adhia
Managing Directors & CEO : Shri Sanjiv Chadha
Executive Directors : Shri S. L. Jain
Shri Vikramaditya singh Khichi
Shri Ajay K Khurana
Shri Debadatta Chand
Directors : Shri Amit Agarwal
Shri Srinivasan Sridhar
Smt Soundara Kumar
Smt Parvathy V. Sundaram
Bank of Baroda - Vision, Mission, Core Values:
I. Saga of Vision: It has been a long and eventful journey of almost a century across 21
countries. Starting in 1908 from a small building in Baroda to its new hi-rise and hi-tech
Baroda Corporate Centre in Mumbai, is a saga of vision, enterprise, financial prudence and
corporate governance.
II. Mission Statement: To be a top ranking National Bank of International Standards
committed to augmenting stake holders' value through concern, care and competence.

16. III. Core Values:
Customer Centricity Our customers’ interests lie at the core of all our actions.
Integrity We are ethical and transparent in our words, actions and dealings
with all stakeholders.
Courage We are resilient in the face of adversity and having faith in our
beliefs.
Innovation We create value through new ideas.
Excellence We strive for continuous improvement in our policies, systems, and
processes.
Passionate
Ownership
We display energy, enthusiasm and commitment towards our Bank
and we work together for the Bank.
Bank of Baroda – Products & Services:
 Savings Accounts: Bank of Baroda offers a host of savings accounts for its customers
to take care of all of their banking needs. Premium accounts, salary saving accounts,
basic saving accounts or specialized accounts for senior citizens or minors, BOB
women’s savings bank account – the bank has every variety of savings accounts that a
customer needs.
 Current Account: Bank of Baroda offer 3 types of current accounts to its customers.
These accounts provide a host of banking benefits such as fund transfer receive
cheques, cash, etc.
 Home Loans: The bank offers a variety of home loan options to its customers, thus
enabling them to purchase a house under their own name. These home loans can be
availed at attractive interest rates.

17.  Personal Loans: Bank offers variety of personal loans. In metro and urban areas, the
loan amounts can range from Rs.1 lakh to Rs.10 lakh. In semi-urban and rural areas, it
can vary from Rs.50000 up to Rs.5 lakh.
 Car Loans: The car loan provided by Bank of Baroda offers interest rate concessions,
flexible repayment options, as well as the lowest processing fee in the banking
industry, making this one of the best car loans in India.
 Mudra Loans: Bank of Baroda Mudra Loan scheme was launched following the
government's mandate to provide funds to the unfunded non-farm MSME enterprises.
Under this scheme, applicants can get loans up to Rs. 10.00 lakh without providing
any security. The funds can be used to establish a new business or expand the existing
one.
 Education Loans: It provides range of loan products is the Bank of Baroda education
loan. It helps students looking to pursue quality education from educational
institutions in India or abroad.
 Two wheeler Loan: Bank of Baroda offers two-wheeler loan up to Rs.10 lakh with 60
months repayment period. The documentation process is very convenient for users.
 Fixed Deposits: Bank of Baroda offers fixed deposit schemes to individuals for a
short-term as well as for long terms. There are different types of schemes with
attractive rates of interest.
 Recurring Deposits: The minimum monthly deposit on RD accounts is Rs.50 in rural
and semi-urban branches and Rs.100 in urban and metro branches. This service is
cost-effective.

18.  Credit Cards: Bank of Baroda credit cards are loaded with special benefits and the
card holders are rewarded with privileges and savings on every usage. There are
varieties of credit cards which includes BOB Premier Credit Card, BOB Select Credit
Card, BOB Easy Credit Card & BOB Prime Credit Card
 Debit Cards: Bank of Baroda offers 6 types of debit cards to suit the growing
requirements and needs of its customers. Debit cards can be used for various purposes
such as cash withdrawals from ATMs, purchases at shopping outlets.
 Balance Enquiries: The bank allows its customers to check balance through various
methods which includes net banking, mobile banking, SMS banking, passbook,
missed call facility etc.
 Mobile Banking: With Bank of Baroda Mobile banking, account holders can avail all
the banking facilities from the convenience of their home. Account holders can
download and use the BOB Mobile application.
 Net Banking: The bank helps the users with the facility of internet banking called as
‘Baroda Connect. This service is available 24/7.
 Customer Care: Customers can approach the customer service department of Bank of
Baroda in case of any kind of queries, from generating PIN for ATM transactions to
blocking a credit or debit card etc.

19. Bank of Baroda - SWOT Analysis:
Strengths:
 Complete Banking Products Portfolio: Bank of Baroda has a wide range of banking
services and financial instruments available for its customers.
 Strong Capital Position: Bank of Baroda held a strong capital adequacy ratio (CAR)
of 13.45 percent as of 31 March 2019. Bank of Baroda has a business of 218 billion
US Dollars.
 Large Customer Base: Bank of Baroda has a customer base of 131 million.
 Merger: Government has merged Bank of Baroda, Vijaya Bank, and Dena Bank.
Bank of Baroda is now the third-largest lender in the country.
 Interest Rates: Interest rates are less as compared to private sector banks.
Weaknesses:
 NPA: The NPA of Bank of Baroda is increasing year by year. In the year 2019, it was
15610 Crores and in the year 2020, it was 21577 Crore rupees. The bank is not able to
decrease this NPA.
 Less Presence in International Markets: Bank of Baroda has business in 27 countries
but the bank is primarily focused on its Indian market. BOB’s must increase their
services in international markets to increase its profits.
 Forex Fraud: A number of employees have been caught in Forex Scam over the years.
Even the RBI penalized the Bank of Baroda for a forex fraud of almost 6000 crores.
Likewise, there have been other scams concerning bank employees.

20. Opportunities:
 UPI / Payment Bank: New banking products like UPI Payment Wallets are also a
great opportunity for the bank. Bank can launch its UPI Payment app like Paytm or
PhonePe.
 Development of Loan Market: Due to developing infrastructure Bank of Baroda can
provide loans at less interest rates to potential customers.
 Business / Personal Loan: The business and personal loan segment can be a great
opportunity for Bank of Baroda.
Threats/ Challenges:
 High competition: There are many national and international players in Banking
Industry. Due to intense competition business of Bank of Baroda is affected and this
can be a major threat to the bank.
 Online Lending: Online Loans offered by various NBFC and Private Banks can be a
major threat to the Personal Loan department of Bank of Baroda.
 Private Banks: Private Banks are a big rival to government banks because of the
facilities offered and because of the strong functionality of private banks over
government banks.
 Payment Wallets: Payment Wallets can also affect the business of Banks. This can be
a major threat to Bank of Baroda and other government sector banks.

21. Bank of Baroda - Financial Statements:
I. Profit & Loss Account (Consolidated)
II. Balancesheet as on year ending 31st March 2021

22. CHAPTER-2
CONCEPTUAL BACKGROUND
&
STUDY

23. 2.1 Conceptual Background:
2.1.1 Credit / Bank Credit:
The word credit is derived from latin word ‘credere’ which means “to trust, to entrust, to
believe”. Credit/ Bank Credit is the trust in which bank allows other party to provide money
or resources where other party does not reimburse the bank immediately, but instead
promises either to repay or return those resources at later date. This repayment includes
principle amount as well as interest.
Simply, Bank Credit is the total amount of money a person or a business borrow from a bank
or other financial institution. This fund which bank lends comes from the customers of banks
who put their deposits or investments in bank. In return for using their deposits bank provide
small amount of interest on their deposits.
2.1.2 Risk Management:
Risk is the possibility of a situation that could be dangerous or have a bad result. Risk
Management is the process of identifying, assessing, controlling threats to an organization’s
capital & earnings. This threats could have wide variety of sources like financial uncertainty,
legal liabilities, strategic management errors, accidents & natural disasters. Risk management
allows organizations to attempt to prepare for the unexpected by minimizing risks & extra
costs before they happen.
2.1.3 Major risks faced by banks:
I. Credit Risk / Default Risk: Credit risk is the biggest risk for banks. It occurs when
borrowers fails to pay the borrowed amount or interest on borrowed amount given by bank.
As lending loans is primary function of bank this is bigger risk compared to other risks.
Banks can’t fully protect themselves from credit risk due to their nature of business model,
they lower their exposure in several ways.

24. II. Operational Risk: Operational risk is risk of loss resulting from inadequate or failed
internal processes, people, systems or external events. All banks face operational risk in their
day to day operations across all their departments including treasury, credit, investments etc.
3 main causes of operation risks are – Human intervention & Error, Failure of It
software/system, Failure of internal processes.
III. Marketing Risk: Market risk usually occurs from bank’s activities in capital market. It is
risk of losses in on-balance or off-balance sheet positions that arise from movement in market
price. It is most prominent for banks present in Investment banking.
2.2 Credit Risk Management:
Credit risk is one of the biggest risk faced by the Bank of Baroda as if customer failed to pay
the principal or interest on the loan sanctioned to him by bank, it creates risk to earnings of
the bank. The loan is the largest contributor to the credit risk of the bank. Other than loans
there are other activities of banks too which are contributor to the credit risk, such activities
could be shown or not shown on balancesheet. An effective Credit Risk Management is very
important for stability & long term success of the bank.
Credit Risk Management have to manage banks transactions which includes:
 For loans, repayment of principal amount or/& interest amount.
 For Letter of Credit, funds should get repaid if the exporter failed to meet his
obligations in trade & bank has to pay on his behalf.
 For Treasury Operations, payment/ payments from other parties should get collected
regularly.
 For Trading in securities business, securities settlements should be constant.
 In case of foreign transactions, free flow of foreign currency should not get affected
by other parameters.
 Effective Credit Risk Management should have strong management which can
manage all these factors.

25. Credit Risk Management includes:
I. Identification of Credit Risk:
This is important & primary function of Credit Risk Management process. This includes:
 Effects on short run due to existing risk.
 Potential risk in geographical location.
 Risk involved in International transactions.
 Examination of potential & doubtful borrowers.
II. Measurement of Credit Risk:
It includes calculation of weightage of risk on different parameters like intensity, etc. For
measurement of credit risk bank differentiate risks in various categories to identification &
intensity of risk. This includes:
 Understanding potential & depth of credit risk.
 Classification of credit risk on different parameters.
 Taking effective steps to minimize risk/losses of credit.
 Planning of mitigation of credit risk.
III. Monitoring of Credit Risk:
This function includes keeping check with measurement of credit risk & examination &
taking necessary steps in credit risk. This includes monitoring credit risk by taking base of
credit policies & procedures. This includes:
 Analysis of financial condition of counter party. Also analysis of financial indicators
such as liquidity, profitability, etc.
 Process of monitoring credit should be as per the terms & conditions of various
aspects such as repayment of principal amount, interest amount, etc.
 Monitoring collateral security & borrower’s financial stability.
 Identification of Non-Performing Assets.
 Classification of credit loss provision.

26. IV. Controlling Credit Risk:
This function includes operations of credit risk management. They have to check up
constantly with credit monitoring. The bank should adopt effective mechanism for controlling
credit risk operation. This includes:
 Examining risk profiles & potential risk & recovery.
 Internal & External audit analysis.
 Provide input to control operating personnel.
2.3 Three pillars of Credit Risk Management:
I. Credit Risk Policy:
 Credit Risk Policy should be approved by the Boards of the bank. Policy documents
should include Identification/ Measurement/ Risk grading/ Risk mitigation
techniques/ documentations.
 Credit Risk Policy should also define portfolio management guidelines, Criteria for
risk acceptance, effective author structure for credit approval, target markets &
procedures for maintenance. This approved Credit Risk Policy should be accepted &
followed by all the branches of the bank. All the credit sanctions of the banks should
be according to credit risk policy of the bank.
 This policy should be implemented by the seniors & they should be responsible for
credit operations of the bank.

27. II. Credit Risk Strategy:
 With the objectives of the guiding the bank branches regarding to credit operations/
credit policy/ procedures bank should develop their Credit Risk Strategy approved by
the Board.
 Strategy should clearly define acceptance level of credit limit & risk/ reward from
credit activities of the banks operations. While granting loans bank should access
different parameters such as currency, term period, profit, geographical location, etc
in Credit Risk Strategy.
 This will help bank to identify target market where loans are needed more ex- MSME
sector, diversification, to know cost for credit lending & risk of bad debts, etc.
 This strategy policy should be implemented by the seniors & they should be
responsible for credit operations of the bank.
III. Credit Operations & System:
Each bank should develop their own credit operation system which will follow credit risk
policies & credit risk strategy. The effective credit operations plays very important role in
Credit Risk Management of bank.
2.4 Board & Senior Management:
Board of Directors & Senior level management plays very crucial role in credit risk
management of the bank. Board of directors are responsible for approving of Credit risk
policy & Credit risk strategy. On the other hand Senior Management of bank is responsible
for implementation of approved Credit risk policy & Credit risk strategy.
Senior management are also responsible for modifying, developing credit policy &
procedures for effective Credit risk management.
Broadly their responsibilities are classified as:

28. I. Board of Directors are responsible for:
 The formulated credit strategy should be inclusive of all parameters such as currency,
term period, etc. It should also include various aspects of credit portfolio such as
target market, etc.
 Periodic review of financial reports such as provision on loan losses, audit reports of
credit & monitoring.
 Delegation of authority & responsibility on lower level should be clearly defined for
credit risk strategy.
 Periodically review of financial reports & changes to be made in credit risk strategy if
necessary.
 Reviewing & management of credit portfolio of bank also internal audit for assessing
for policies & standards to be followed.
 Credit risk policy & credit risk strategy should be followed by all branches of bank.
II. Senior Management are responsible for:
 While granting credit, Credit risk policy/ strategy should be followed.
 Review of credit portfolio by internal auditing should be done properly.
 Internal exposure limit, regulatory requirements should be according to Credit risk
policy/strategy.
 Procedures should be formulated properly & furtherly implemented.
 Delegation of authority & responsibilities should be clearly defined.
 The quality of work should be thoroughly for new credit activities & risk associated
with it should be properly recognized & managed.

29. 2.5 Policies, Procedures & Limits:
I. Policies related to Limits:
 For effective Credit Risk Management it is very vital to have well defined & sound
policies, procedures & limits. The policies should be approved by board of directors
& implemented by senior management.
 Credit policy should define credit risk concentration, credit limits & exposures to risk
which bank will face in future. Credit policy should clearly define percentages of
banks net fund i.e. from banks capital & reserves which are available for granting
loans as investment. Credit limit should make sure that credit activities of bank is
diversified. Credit policy should also focus on inclusive measures & well
documentations for allow bank to take measures on credit concentration risk.
 In Credit exposure limit, contingent liabilities like letter of credit, guarantees should
be included. In case of large exposure, bank should get complete information about
debtor. Credit staff should ensure they monitor large debtors & their ongoing
performance of repayment. If there is doubt that debtor will not meet the obligations
of credit terms, this information should be informed to credit management. Further the
contingent plans should be formed as per the terms & situation.
 Sometimes bank also credit fund to the insiders like manager or to the stakeholders,
etc. The policy should also cover rules & regulations of lending loans to insider. This
policy should be approved by the board of directors.
 If there is any changes in in Credit management of the bank, board & senior
management should also review the recovery policy.

30. II. Policies related to Credit Products:
Bank offers various types of loans & credit instruments to customers. Management should
carefully review the existing risk & contingent liability for understanding credit limit of the
bank. The products should be periodically reviewed as per different parameters like maturity
period, pricing, etc. Before offering products to any customers, the product should be
approved by the senior management & board of directors & carefully reviewed.
III. Policies related to Credit Assessments & Approval levels:
Policies related to credit assessments & approval levels should be comprehensive. The risk
profile of the counter party should be assessed by obtaining adequate information of
borrower. This includes:
 Purpose of Credit
 Repayment terms & sources
 Current risk profile of customer
 Customers past loan history details like previous loans, repayment history, etc.
 Customers Credit Ratings given to him by Credit Bureau.
 Current capacity of customers for loan amount & repayment.
 Terms & conditions of proposed terms also future risk profile of customer.
IV. Techniques of Credit Risk Mitigation:
Bank use various techniques for mitigation of credit risk such as guarantees, collateral &
netting off of credit against deposit of same borrower. This techniques transfers credit risk or
reduces credit risk. While other risks arises out of it such as liquidity risk, market risk.
Therefore it is very necessary that banks should have proper policies & procedures to control/
reduce this risks. Banks often do collateral transactions in which credit exposure or potential
credit exposures is hedged fully/ partly by borrower.

31. Following are necessaries for collateral transactions:
 Legal documents used for collateral transactions.
 Right of possession to bank in the event of default.
 Procedures for timely liquidation of collateral.
 Valuation of collateral to confirm its realization.
Banks mostly never use collateral securities for repay, they primarily assess counter parties
capacity to repay before credit transaction.
2.6 Measuring of Credit Risk:
Bank should have proper procedures for measurement of overall exposure to credit risk as
well as bank should also have exposures to other information such as product, market
segment, customers, etc. for appropriate risk management decision making.
Credit risk is measured by assessing different parameters such as nature of credit, term
period, guarantee, collateral security, risk of default, etc. Bank should analyse credit risk
considering all these parameters for measurement & management of credit risk. Focus on
causes of Credit risk.
Causes of Credit Risk:
Credit Concentration: Credit on one borrowers/industry instead of diversifying credit. i.e.
putting all credit fund in less borrowers which causes risk in case of default
Credit Granting/ Monitoring: Ineffective functioning.
Credit exposure in market.

32. 2.7 Internal Risk Rating:
Banks have their own internal risk rating procedure for measuring credit risk. It is tool used
for monitoring credit risk & also can be used for portfolio management. The bank consider
various parameters for internal risk rating such as periodically repayment of loans along with
interest in timely manner, etc. Ratings are given to individual counterparty on the basis of
their repayment activities.
This includes:
 Assessment of counter party.
 Qualitative & Quantitative assessment of credit risk
 Facilitates Acceptance/ Rejection of Credit proposal of borrower.
 Credit ratings are done on 2 parameters to see stability of counterparty i.e. Worst
condition or Current condition of Counter party.
 Grades can be assigned :
 Alphabetically – AAA, AS, BBB, A++, etc.
 Numerically – I, II, III, etc.
 Assessment on Quantitative factors includes different parameters like
 Sales/ Income, Net profit, Cash flow, Current ratio, etc.
 Assessment on Qualitative factors includes different parameters like
 Regulatory framework, financial commitment, cyclical factors, etc.
2.8 Administration of Credit:
It is responsibility of senior management to set up credit administration team.
Credit administration team is tasked with the entire credit process management. It very
important that granted credit is well maintained & administrated.
Credit Administration includes preparation of terms & conditions, record keeping, safe
custody of securities, etc. Credit file plays important role in credit administration.

33. Each bank have to maintain credit file which enable bank to loan supervision by different
aspects such as internal review, audit, etc. It Includes:
 Credit Application
 Evidence of credit approval
 Borrower’s latest financial information
 Dates & records of credit review
 Records of guarantees/ securities
 All terms & conditions of transactions
 Legal validity, valuation of security, registration procedures of securities, etc.
Credit Administration Department have following functions:
 Documentations: In accordance with terms & conditions.
 Credit Disbursement: Obtaining proper approval of loan, complying it with terms &
conditions before sanctioning.
 Loan Repayment: Communication with borrowers on their due date. Analysing loan
accounts & reporting to senior management.
 Maintenance of Credit File.
 Security Maintenance: Maintenance of security documents in safe place.
2.9 Audit & Internal Controlling:
For Credit Risk Management every bank has its own independent internal system for
assessment & credit management. The results of audit & internal controlling is reported to
senior management. It ensures compliances with the policy in lending loans. This
independent system ensures that:
 Credit management process is effective.
 Rules & regulations by Board of management is followed correctly.
 Identifying limitations in policy & procedures.
 Process of internal risk rating.
 Change in strategy in credit risk management.
 Identification of risk

34. 2.10 Non-Performing Assets:
Non-Performing Assets are known as loans (principal/amount) which are not paid on their
due date or has gone default. This is outcome of inability of effective credit risk management.
It is loss for bank & affects Recycling of funds. It causes due to banks’ ineffective dealing
with counter parties like pre-sanctioning assessment, post sanctioning credit recovery
procedures, delay in legal actions on default.

35. CHAPTER-3
REVIEW OF LITERATURE

36. Review of Literature:
 Ali Fatemi, Iraj Faloodi (March2006) studied the practices of credit risk management
by the US-based financial institution by sending short questionnaire through mail to
top 100 banking firms’ headquarters. It was found that identifying counterparty credit
risk is the single most important purpose served by the credit risk model utilized.
 Dr. B S Bodla, Ms. Richa Verma (2009) studied about financial sector & banking
sector weaknesses by risk mechanism especially credit risk management and collected
primary data from scheduled commercial banks itself to study the authority & their
power of decision making in credit risk framework. Their findings are the banks don’t
use derivatives as credit risk management mechanism & banks prefer risk rating as
standard tool by using of MIS.
 K Vaidya Nathan (2013) wrote an industry level all-inclusive book on bank credit &
financial transactions impacts also significance of credit risk management. Further
studied how to assess credit risk, credit risk management process, credit recovery &
improvement in credit risk management framework.
 K Bhavna Raj & Dr. Sindhu (2013) wrote an article to study the impact of training by
banking personnel in credit risk management. They suggested effective training
methods on credit risk management to ensure sound banking environment.
 Dr. Khalil Elian Abdelrahim (2013) studied the determinants, challenges &
developing methods of credit risk management of Saudi banks. The methodology
used was descriptive & analytical using CAMEL model. He suggested many methods
like adopting mitigation techniques for credit default risk, inter-exchange of
information of risky customers, etc for strong credit risk management system of Saudi
banks.

37.  Rekha Arunkumar & G. Kotreshwar (Jan 2006) studies & highlighted importance of
credit risk as it is biggest risk faced by any banks compared to other risks. They
highlighted how credit risk can have negative impacts on financial stability of banks.
Furtherly they suggested various techniques for strong credit risk management
framework for long term survival of banking institutions.
 Sirus Sharifi, Arunima Haldar & S V D Nageswara Rao (Mar 2019) studied impact of
credit risk components on the performance of credit risk management & growth of
non-performing assets due to it in the commercial banks of India. Their finding are
Indian commercial banks faces high losses due to non-performing assets.
 Miss Roopa Kurne (2015) wrote an article on Credit Risk Management in Indian
Banking System highlighting concept of credit risk & significance of credit risk
management as it is critival component for long term success of any bank.
 Grace N Mwangi (2010) studied about the financial performance in term of
profitability & credit risk management in terms of loan performance & capital
adequacy on the commercial banks of Kenya. Further suggested to adopt credit risk
grading systems for banking institutions & borrows risk grades should be clearly
stated on credit application.
 Serwadda Isah (2018) studied the impact of credit risk management on financial
performance of commercial banks in Uganda for a period 2006-2015. Study results
showed that there was inverse/negative impact of bad loans on financial stability of
banks due to improper credit risk management. Suggests that banking institutions
need to create & follow strong credit policies & develop strong credit administration.

38. CHAPTER- 4
RESEARCH METHODOLOGY

39. 4.1 Statement of problem:
As lending loans is one of the primary function of the banks, but as borrowers fails to repay
bank their loans it has Credit Risk has become major problem for banks. The profit & income
source is dependent majorly on lending credit unction. If borrowers fails to repay their
borrowing there will be huge loss to the banks which can lead to shutting down. Therefore
Credit Risk Management is very important for banks.
As per the data of 2019-20 Bank of Baroda recovered only 607.86 cr. while 10457 cr. were
still outstanding. Such a huge amount outstanding & has to be written off yet could which is
very huge problem to Bank of Baroda that’s why Credit Risk Management is very significant
for bank.
4.2 Needof the Study:
Credit Risk is majorly faced risk by the bank. There should be proper implications of Credit
Risk Management in the bank. Study is done to understand what Credit Risk Management.
The analysis is done on the Bank of Baroda. Study focuses on understanding framework of
Credit Risk Management structure & functions in the bank.
4.3 Objectives of the Study:
 To understand what is Credit Risk Management & need of Credit Risk Management.
 To study complete history & structure of Bank of Baroda.
 To study Credit Risk Management framework.
 To study various functions & procedures in Credit Risk Management.
 To analyse Credit Risk Management by use of “Ratio” tool & data analysis.
 To offer suggestions to Bank of Baroda.

40. 4.4 Scope of the Study:
Study focuses on understanding Credit Risk Management. Study throws light on functioning
of Credit Risk Management framework as per the RBI’s rules & regulations. Study is based
on the structure of Bank of Baroda.
Study is very useful for Bank of Baroda, Customers, Students & anyone who wants to
understand Credit Risk Management. Study also gives suggestions on analysis done on Credit
Risk Management.
4.5 ResearchMethodology:
Analysis is done on research papers & reports given by Bank of Baroda. Study is mostly
analytical & theoretical. Study includes examination of data collected & critical skills while
decision making in Credit Risk Management. The financial data is derived from the annual
reports published by the Bank of Baroda.
Sources of data:
The study is based on Secondary data. The data of the study is derived from the:
 Financial records of Bank of Baroda.
 Quarterly annual reports published by the Bank of Baroda.
 Research papers.
 Websites.
Sampling Design:
Data has been collected from last 4 years financial statement for the study of years 2018-
2021of Bank of Baroda.
Tools used for Study:
Financial Analysis.
Ratios.

41. 4.6 Limitations of the Study:
 Study has been done on Bank of Baroda only.
 In depth study could not be possible due to confidentiality of Bank of Baroda.
 Nature of study is more theoretical & less financial (numerical) as the all the
necessary financial data could not be obtained.
 Study is done till Q4 2021 (31st March 2021) only.

42. CHAPTER- 5
DATA ANALYSIS
&
DATA INTERPRETATION

43. 5.1 Analysis of Deposits
Table 5.1: Table showing Total Deposits of Bank of Baroda (₹ in Crores)
Chart 5.1: Analysis of Total Deposits of Bank of Baroda (in %)
Analysis & Interpretation:
As we can understand from graph, Deposits in Bank of Baroda has been increased
significantly from 2018 to 2021.
As per base year 2018 the deposit was ₹591314.82cr which has been increased to
₹966996.93cr in 2021. Increase in deposits shows customers trust in Bank of Baroda. This
also shows effective operations of Bank of Baroda.
0
50
100
150
200
2018 2019 2020 2021
Deposits
Year Deposits(₹) (%)
2018 591314.82 100
2019 638698.72 108.0
2020 945984.43 160.0
2021 966996.93 163.5

44. 5.2 Analysis of Loans & Advances
Table 5.2: Table showing Loans & advances in Bank of Baroda (₹ in Crores)
Year Loans & Advances (₹) (%)
2018 458880.47 100
2019 502469.41 109.5
2020 752510.5 164.0
2021 765715.44 166.9
Graph 5.2: Analysis of Loans & Advances in Bank of Baroda (in %)
Analysis & Interpretation:
As we can understand from the graph there is increase in Loan & Advances in Bank of
Baroda. We can see that Loans & Advances in 2018 was ₹458880.47cr in 2018 which
increased to ₹765715.44cr in 2021. We can also see there is comparatively lesser demand of
loans in the year 2021 from year 2020.
As there is rise in huge amount of loan there is more need of effective Credit Risk
Management in Bank of Baroda.
0
50
100
150
200
2018 2019 2020 2021
Loans & Advances

45. 5.3 Analysis of Credit to Deposit Ratio
Credit to Deposit Ratio = Loans & Advances * 100
Deposits
Table 5.3: Table showing Credit to Deposit Ratio in Bank of Baroda (₹ in Crores)
Year Loans (₹) Deposits (₹) Ratio
2018 458880.47 591314.8 77.6
2019 502469.41 638698.7 78.7
2020 752510.5 945984.4 79.5
2021 765715.44 966996.9 79.2
Graph 5.3: Analysis of Credit to Deposit Ratio in Bank of Baroda (in %)
Analysis & Interpretation: As we can understand from graph, the Credit to Deposit ratio was
constantly increasing from year 201- to year 2019 & then it decreased in the year 2021. The
Credit to Deposit Ratio was 77.6 in base year 2018 which came to 79.2 in year 2021.
As we can see Credit to Deposit Ratio has been slightly decreased from year 2021 to 2021
which indicates that Bank of Baroda relatively less relied on deposits for lending loans,
which is good indicator showing good credit recovery & less reliability in Bank of Baroda.
76.5
77.0
77.5
78.0
78.5
79.0
79.5
80.0
2018 2019 2020 2021
Credit to Deposit Ratio

46. 5.4 Analysis of Current Assets
Table 5.4: Table showing Current Assets in Bank of Baroda (₹ in Crores)
Year
Current
Assets (₹) (%)
2018 551447.9 100
2019 591699.0 107.3
2020 874411.6 158.6
2021 886128.3 160.7
Graph 5.4: Analysis of Current Assets in Bank of Baroda (in %)
Analysis & Interpretation: As we can understand there has been significant growth in Current
Assets of the Bank of Baroda. The Current Assets were ₹551447.9 cr. in 2018 which
increased to ₹886128.3 in 2021. We can see from the graph there has been constant
increasing in the current assets of Bank of Baroda.
We can understand that Current Assets are increasing so Bank of Baroda has to be more
effective on the recovery of short term loans & advances given. There is more need of
effective Credit Risk Management is recovery of short term lending.
0
20
40
60
80
100
120
140
160
180
2018 2019 2020 2021
Current Assets

47. 5.5 Analysis of Current Ratio
Current Ratio = Current Assets * 100
Current Liabilities
Table 5.5: Table showing Current Ratio in Bank of Baroda (₹ in Crores)
Year
Current
Assets (₹)
Current
Liabilities (₹) Ratio
2018 551447.85 22718.21 24.3
2019 591699.03 24113.29 24.5
2020 874411.62 47005.56 18.6
2021 886128.26 44474.19 19.9
Graph 5.5: Analysis of Current Ratio in Bank of Baroda (in %)
Analysis & Interpretation: As we can understand from the graph Current ratio has been
decreased in year 2021 compared to base year 2018. As we can see from the table Current
Assets are almost double of the Current Liabilities.
This shows that Bank of Baroda is able to meet its short term obligations. It also shows Bank
of Baroda to focus on effective credit recovery of short term loans & advances given.
0.0
5.0
10.0
15.0
20.0
25.0
1 2 3 4
Current Ratio

48. 5.6 Analysis of Credit Portfolio
Table 5.6: Table showing Industry wise Credit Portfolio of Bank of Baroda (₹ in Crores)
Industries 2018 2019 2020 2021
Corporate 164783 185943 291543 291615
MSME 51730 55455 87328 96200
Retail 82506 85390 120657 141287
Agricultural 49583 56623 87921 99543
Other 2569 13276 23596 33462
Total 351269 396687 611046 662107
Graph 5.6: Analysis of Credit Portfolio (Industry wise) in Bank of Baroda (₹ in Crores)
Analysis & Interpretations: As we can understand from the graph, Bank of Baroda give more
loans to corporate sector. Total loans given was ₹351269cr in year 2018 which gradually
increased to ₹662107cr in year 2021.
As we can see year wise & industry wise also loans given to these sectors are constantly
increasing per year. Bank of Baroda needs to build effective Credit Risk Management system
as banks are giving huge loans to these sectors. Bank of Baroda needs to more focus on
corporate sector for loan recovery.
0
50000
100000
150000
200000
250000
300000
Corporate MSME Retail Agricultural Other
Credit Portfolio

49. 5.7 Analysis of Outstanding Credit
Table 5.7: Table showing Industry wise Outstanding Credit in Bank of Baroda (₹ in Crores)
Industries 2018 2019 2020 2021
Agricultural 49583 56623 85182 99543
Retail 68765 85390 103720 132565
Other 232921 254674 328170 408968
Graph 5.7: Analysis of Outstanding Credit (industry wise) in Bank of Baroda (₹ in Crores)
Analysis & Interpretations: As we can understand from the graph, the outstanding in credit
keep increasing every year. Total outstanding was ₹49583cr, ₹68765cr, ₹23921cr in year
2018 for Agriculture-Retail & Other industries respectively which increased to ₹99543cr,
₹132565cr, ₹408968cr in year 2021 respectively.
As we can see that from base year 2018 the outstanding loans are increased 2 times in
year2021. So there is need of effective Credit Risk Management in Bank of Baroda for loan
recovery & reduction for outstanding credit.
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2018 2019 2020 2021
Outstanding Credit

50. 5.8 Industry wise Contribution to Non-Performing Assets
Table 5.8: Table showing Industry wise contribution to NPA (Gross) (₹ in Crores)
Industries 2018 2019 2020 2021
Corporate 30792 26354 36934 27234
MSME 7439 6229 11370 13025
Retail 1964 1490 2395 3044
Agricultural 6753 6073 9072 8450
Other 1241 232 673 592
Total 48189 40378 60444 52345
Graph 5.8: Graph showing Industry wise contribution to Non-Performing Assets (₹ in Crores)
Analysis & Interpretations: As we can understand from graph, each sector contributes to
Non-Performing Assets in respective to credit sanctioned to them. The total NPA was
₹48189cr in year 2018 which increased to ₹52345 in year 2021.
We can see that there is huge amount contributes to Non-Performing Assets each year. The
NPA has been decreased in year 2021 from 2020 but there is still need of effective Credit
Risk Management in Bank of Baroda to minimize Non-Performing Assets.
0
5000
10000
15000
20000
25000
30000
35000
40000
Corporate MSME Retail Agricultural Other
Contribution to NPA (Gross)

51. 5.9 Analysis of Non-Performing Assets
Table 5.9: Table showing Non-Performing Assets in Bank of Baroda (₹ in Crores)
Year Net NPA (₹) (%)
2018 23483.0 100
2019 15609.5 66.47
2020 21576.6 91.88
2021 21800.0 92.83
Graph 5.9: Analysis of Non-Performing Assets in Bank of Baroda (in %)
Analysis & Interpretation: As we can understand form the graph, we can see there is decrease
in Non-Performing Assets from the year 2018 to 2021. The NPA was ₹21576.6cr in year
2020 which increased by ₹224cr in the year 2021.
This shows there is more need of Credit Risk Management in Bank of Baroda to more
recovery on Non-Performing Assets.
0
20
40
60
80
100
2018 2019 2020 2021
Non Performing Assets

52. CHAPTER-6
CONCLUSION

53. 6.1 Findings/ Recommendations:
 Study was carried on Credit Risk Management of Bank of Baroda. Findings are:
 Study shows that Credit Risk Management is utmost important in any bank to
minimize credit risk & avoid losses.
 Bank of Baroda’s functioning is very well overall in terms of increasing deposits,
gaining trust of customers, maintaining reserve funds, etc.
 Bank of Baroda gives more credit to customers but Credit Recovery process
somewhere lacks in the bank.
 Bank of Baroda has sanctioned huge amount of loans i.e. ₹765715.44cr in 2021
whereas bank lacks proper functioning of Credit Risk Management, so bank should
focus on this area.
 Despite huge loans sanctioned Bank of Baroda has good Credit to Deposit Ratio
which shoes less dependability on deposits for lending loans.
 Current Ratio of Bank of Baroda is almost 2:1 which shows banks’ ability to meet its
short term debts.
 Credit portfolio of Bank of Baroda is very huge. Bank of Baroda should focus on
corporate loans for recovery as huge funds are given to this area.
 There is still increase in Contribution to NPA due to failure of borrower’s ability in
each industry sector.

54. 6.2 Conclusion:
Study was done on Credit Risk Management on Bank of Baroda. Study attempted to cover all
the major aspects of Credit Risk Management such as Credit Risk Management Framework,
Authority & Responsibility of Board & Senior Management in Credit Risk Management,
Credit Risk Management Function, still in depth study was not possible due to limitations of
availability of data required, confidentiality & time constraint.
Credit Risk Management focuses on managing of Credit Risk by following Credit Policies &
Procedures & well-functioning of Credit Department. It is very important to minimize credit
risk to avoid losses. Credit Risk Management ensures efficiency, profitability & stability of
bank.
Thus we can say that Credit Risk Management is core function & has central importance in
banking function. Bank of Baroda should focus prominently on its Credit Risk Management
as there is lack in credit recovery causing too much risk to the profitability of bank. Bank of
Baroda should focus to reduce its growth of Non-Performing Assets as it decreases
profitability of the bank.

55. BIBILOGRAPHY:
 https://www.bankofbaroda.in/
 https://www.rbi.org.in/
 https://scholar.google.com/
 https://en.wikipedia.org/wiki/Main_Page
 https://www.equitymaster.com/research-it/ipo/bom.asp
 https://www.moneycontrol.com/
 https://www.academia.edu/
Bank of Baroda’s Record:
 Financial Statement year ending 31st March 2021.
 Performance Analysis of Bank of Baroda Quarterly wise.
 Annual Reports of Bank of Baroda.