Abstract:

Özet: The main objective of the study is to compare risk management practices of the selected conventional and Islamic banks. A total number of 14 private banks (7 are of interest based and 7 are of interest free) have been selected for the study purpose. For the purpose of collection of data, a total number of fourteen respondents taking one from each bank have been chosen. The main findings of the study are: i) there exists variation as regards the level of awareness and concernedness in respect of various types of risks between conventional and Islamic banks, ii) there appears to be a gap between the conventional and Islamic banks in the practices of risk identification, iii) there also exists variation between the conventional and Islamic banks in understanding of risk and risk management practices, iv) the conventional banks attach more importance to the advanced techniques of risk management as well as risk mitigation. But the Islamic banks give more importance to the traditional practice mainly and v) a number of problems has been facing in risk management practices by the respondents. Of theses the major ones are: lack of qualified and experienced personnel, poor loan recovery and lack of market information as regards bank risk. Of the suggestions mentioned by the respondents for the removal of the problems; settings central MIS, moral persuasion of the borrowers, long term guideline of the central bank, modern loan monitoring system are the major suggestions.

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