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Credit and Liquidity Risk Assessment of NCC Bank: A Correlational Analysis

	International Journal of Scientific Research and Engineering Development (IJSRED)	Full Text:
	Published Issue : Volume-4 Issue-2
	Year of Publication : 2021
	Unique Identification Number : IJSRED-V4I2P54
	Authors : Asma Priyanka
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Abstract :

Credit risk and default risk are two interchangeable terms. Credit risk arises mainly from the lending, trade finance, leasing, and treasury business. This can be described as a potential loss from a counterparty's failure to perform as per contractual agreement with the bank being financially incapable or unwilling to repay it. Financial incapability arises when the creditor's source of earning becomes volatile. The unwillingness comes from the creditor's tendency to cheat and to make a bulk grain from the fraudulent activities. At a stretch, credit risk for the bank illustrates that the bank's performing loan portion can turn into non-performing ones. And that will decrease the recovery rate of the loan extended, and, as a result, the bank will face trouble providing the required interest amount by the depositors. Gradually the bank will become insolvent and maybe some days a bankrupt one.