In banking terminology, credit refers to the loans and advances made by the bank to its customers or borrowers. Indeed, identifying, assessing, and promoting sound risk management practices have become central elements of good supervisory practice. But bank supervisors, such as the Bangladesh Bank, also have an obvious interest in promoting strong risk management at banking organizations because a safe and sound banking system is critical to economic growth and to the stability of financial markets. Banks have invested in risk management for the good economic reason that their shareholders and creditors demand it. Credit Risk Management Contemporary banking organizations are exposed to a diverse set of market and non-market risks, and the management of risk has accordingly become a core function within banks.
