An Appraisal Of Credit Risk Management Practices In Commercial Banks In Nigeria

ABSTRACT

 By its very nature, banking is a very risky business; it is risky in the sense that itis the only business where the proportion of borrowed fund is far higher than the owner's equity. Data from the recent distressed banks has clearly shown that inability to collect loans and advances extended to customers and directors or companies related to directors was a major contributor to the distress. The appraisal of the barii uedit risk management was deemed necessary to play a major role in economic growth and development in Nigeria. Thus, this research was design to highlight the effect of central bank of Nigeria (CBN) regulations on credit risk management practices in commercial banks in Nigeria. As a result of insufficient and lack of up to date data on some areas of this study, chi-square analysis was introduced to analyze the impact of CBN regulations on credit risk management practices in commercial banks. Based on the analysis, it became obviously clear that the central banks regulation has not achieved its predetermined objectives. According to the result of the analysis, credit management and operations in commercial banks were majorly influenced by the directors of these banks rather than the regulatory frameworks of the central banks of Nigeria. Hence, strict adherence to regulatory framework by commercial banks is highly recommended.