A STUDY ON EFFECTIVENESS OF CREDIT RISK MANAGEMENT AT ICICI BANK

Abstract

Credit risk management is a critical function in commercial banking, determining institutional resilience, profitability, and long-term financial stability. ICICI Bank, India's largest private sector bank by consolidated assets, employs a sophisticated multi-tier credit risk framework that integrates quantitative scoring models, regulatory Basel III compliance, and advanced analytics to manage credit exposure across retail, corporate, and SME portfolios. This study examines the effectiveness of ICICI Bank's credit risk management practices, evaluating risk identification mechanisms, credit appraisal methodologies, loan monitoring systems, NPA recognition and recovery strategies, and the role of technology in credit decision-making. Primary data was collected through structured interviews with bank officials and credit analysts. Secondary data was sourced from ICICI Bank Annual Reports (2021–2024), RBI publications, CIBIL reports, and peer-reviewed academic literature. The study analyzes 60 anonymized loan cases across six product categories to assess credit risk management effectiveness. Key findings indicate that ICICI Bank's integrated risk framework, CIBIL-anchored retail underwriting, and early warning systems have contributed to sustained NPA reduction, with gross NPA declining from 5.42% (FY 2021–22) to 2.16% (FY 2023– 24). Recommendations focus on AI-driven risk analytics, real-time portfolio monitoring, and alternative data integration for underserved borrower segments