Abstract

The most crucial component of financial system is bank, particularly for an economy like India. Any issue that results from it has the potential to affect other areas of the nation. India has developed a strong, adaptable, and effective financial system to help it accomplish its economic objective. Despite developing a well-coordinated financial system, Indian banks continue to guard against serious dangers that might send the economy down an unsettling road. For the banks to remain viable in the market for an extended period, it is essential that they manage risk effectively. Banks are the most important resource for anyone wishing to borrow money for a specific reason. The borrower is required to pay back the loan with the agreed-upon interest. Sometimes, for a variety of reasons, the borrower is unable to pay the interest. The loan that the buyer has taken is referred to be a default risk when the bank determines that the specific buyer may not be able to repay the loan in full. The risk of loan default for a certain borrower is caused by a number of factors.

Description