THE COMPARATIVE ANALYSIS OF CREDIT RISK MANAGEMENT PRACTICES OF FOREIGN BANKS AND DOMESTIC BANKS IN MYANMAR

This purpose of the study was to investigate the current practices of credit risk management by foreign banks and domestic banks in Myanmar. There are two specific objectives in this study; to identify the credit risk management practices adopted by foreign banks and domestic banks and Myanmar and to compare and contrast the credit risk management practices between them. Descriptive research method is used in this study both primary and secondary data are gathered. The study discloses the foreign banks and domestic banks in Myanmar make use of credit management practices that include; loan appraisal, lending process and additionally monitoring and checking processes as risk management defensives. The factors that influences the effectiveness of credit risk management systems used by the foreign banks and domestic banks in Myanmar include establishment of a credit policy that clearly outline the scope and allocation of the bank’s credit facilities, maintenance of credit administration system with adequate controls over credit, top management support and communication of credit guidelines to every officer in the credit department. Moreover, this study shows that credit risk management is the most important contribute to the success and the financial stability of the bank and an understanding of credit risk management help to reduce cost and losses