A Study On Impact Of Credit Risk Management On Financial Stability At Icici Bank

Abstract

Credit risk control is crucial for maintaining the financial stability of banks, especially in a rapidly changing and competitive banking environment. This study delves into how credit risk management affects the financial stability of ICICI Bank, one of India's leading private sector banks. It looks at how risk assessment methods, credit policies, and regulatory frameworks impact the bank’s financial health and overall sustainability. The research employs a blend of financial data analysis and qualitative assessments to evaluate the effectiveness of ICICI Bank’s credit risk management practices. Key indicators such as Non-Performing Assets (NPAs), Capital Adequacy Ratio (CAR), and Provisioning Coverage Ratio (PCR) are examined to gauge the bank’s risk exposure and its ability to maintain stability during economic uncertainties. The findings suggest that effective credit risk management enhances financial stability by reducing loan defaults and ensuring adherence to regulatory standards. Additionally, the study sheds light on the challenges ICICI Bank faces in balancing risk-taking with profitability, along with recommendations for improving risk management strategies.