Impact of credit risk management on financial performance with special reference to SBI and ICICI bank in Rajasthan


  • Heena


This study examines the impact of credit risk management on the financial performance of two major banks in Rajasthan: State Bank of India (SBI) and ICICI Bank. Credit risk management is a critical aspect of banking operations, as it directly influences profitability, asset quality, and overall financial stability. Utilizing a comparative approach, the research analyzes the credit risk management practices of both banks over a five-year period, focusing on key indicators such as non-performing assets (NPAs), capital adequacy ratios, and loan loss provisions. The findings indicate that effective credit risk management significantly enhances financial performance by reducing the incidence of NPAs and improving asset quality. SBI, with its extensive network and customer base, demonstrates robust risk management strategies that lead to a stable financial outlook. Conversely, ICICI Bank’s innovative risk assessment tools and proactive measures also contribute to its strong financial performance. The study underscores the importance of continuous improvement in credit risk management practices to sustain financial health and competitive advantage. These insights provide valuable lessons for banking institutions aiming to optimize their risk management frameworks and enhance financial outcomes in a dynamic economic environment.