DECODING RISK MANAGEMENT PRACTICES IN PAKISTAN FINANCIAL INSTITUTION: A FOCUS ON PRIVATE SECTOR BANKS

The primary aim of study was to decode risk management practices in Pakistani financial institutions. A 5 Likert Scale questionnaire was adopted for the assessment of various characteristics of risk management: i.e. risk identification (RI), risk monitoring (RM), risk assessment and analysis (RAA), risk management practices (RMP), credit risk analysis (CRA) and liquidity risk analysis (LRA). A total of four hundred questionnaires were distributed and three hundred and eighteen had been properly returned from the banking institutions operating in Pakistan. Various analytical models such as Pearson correlation and Regression model was used for evaluation. The outcome from analysis illustrates that in Pakistan Banking institutions are resourceful in monitoring and understanding of credit risk analysis. To achieve higher performance and revenue streams, banking institutions are advised to adopt rigorous risk management practices. Bank employees need sufficient financial education to enable them to perform risk management practices and gain a competitive market position