Private banks in Nepal are better and Public Banks are average.

Thank you for your valuation

Dear Anjay kumar Mishra, Thank you very much for making very important inquiries on the Research Gate portal and inspiring important discussions on particularly important issues.

In my opinion, it is good that there was a discussion in the question of this query.

This is a very interesting and scientifically important topic.

Because the topic is very important so I still read the answers, I follow the interesting discussion.

Question:

Which is the worst bank based on service performance in your country?

this is a very important issue that requires scientific research.

The issue of the quality of the credit risk assessment process carried out in the bank is particularly important for the assessment of the functioning of a commercial bank. In my country, the risk management process was not always carried out reliably. As a result, in the mid-1990s, the risk of a possible financial crisis emerged in my country. We managed to avoid this crisis. Below are the key issues of this problem.

In my country, system prudential instruments work correctly. In commercial activities, commercial banks usually reliably carry out creditworthiness tests of potential borrowers. In addition, investment banking is underdeveloped to a small extent, so currently the sources of the domestic crisis are relatively small. However, this was not always the case. When the banking system was created in my country in the realities of the market economy in the early 1990s, the quality of the loan portfolio deteriorated significantly due to several important reasons. At that time, the banks lacked knowledge about the procedures for testing the creditworthiness of customers and estimating the bank's credit risk. There was no centralized database gathering information from all banks about how borrowers repay loans. This database is created only a few years after system and economic changes and the creation of commercial banks. This database is called Credit Information Bureau in my country. Currently, banks normally use this database when conducting a creditworthiness test of a potential borrower. In addition, at the beginning of the 1990s, many loans were granted without adequate collateral, because a significant portion of business loans was granted after acquiring knowledge without conducting a creditworthiness test and thus without assessing the level of risk that the bank accepts when granting loans. At that time, there was a high credit systemic risk. In many banks, there was a liquidity problem and a significant proportion of banks could lose their liquidity and collapse. However, the central bank managed to notice the problem in a timely manner and through the restructuring of the restructuring bonds addressed to commercial banks, numerous bank failures were avoided. These bonds were offered to commercial banks on preferential terms. Commercial banks the costs of this restructuring lasting the next few years have passed on to customers. Thanks to this, for many years, banking products in my country were much more expensive than in other developed countries. However, since the end of the 20th century, the banking system in my country already looks almost completely different. All prudential instruments, both at individual banks and at the level of the entire banking system, were recreated following the example of developed country standards in the model of the European financial system. There are very few cases of bankruptcy of commercial banks in my country. On the other hand, those that happened were, unfortunately, certain problems that were usually noticed late by banking supervision noticed by the bank supervision until the bank announced the loss of liquidity. This issue should be improved. I deal with the research of credit risk management processes in commercial banks. I invite you to read my publications on this topic.

Private banks

I also study scientifically the sources of the global financial crisis that emerged in autumn 2008 when bankruptcy was announced by the investment bank Lehman Brothers. I also analyze the applied instruments of interventionism as part of monetary policy and assistance packages granted to banks in order to answer the question about their validity and their effects. The applied instruments of intervention state aid for the banking system are considered justified. They were expensive for the entire economy but thanks to this the financial crisis was able to quickly master and limit the negative effects of the downturn in the national economies, liquidity in the commercial banking sector was quickly restored. Most aspects of this issue of the applied instruments of intervention assistance to commercial banks are assessed positively. However, there are many issues to improve to reduce the risk of a similar, next global financial crisis in the future.

I invite you to scientific cooperation

Yes, Dear Ammar A. Oglat these are private banks. Most of the banks that announced permanent loss of financial liquidity and collapsed were usually small private banks in my country. However, large commercial banks have a diverse shareholding structure. In some of these banks the majority shareholder is the State Treasury and it is these banks that usually consider themselves the safest. This is a popular opinion, however, not entirely justified because these banks use analogous procedures for assessing the creditworthiness of clients and credit portfolio risk management processes as those used by foreign banks, which in the 90's began to be favored in my country and commercial banks - historically national, in which the majority financial institution is a foreign financial institution, usually another bank with headquarters abroad or foreign and domestic investment funds.

The issue of the impact of monetary policy on the stability of financial systems in the context of the global financial crisis is described in the publication:

https://www.researchgate.net/publication/320060288_ACTIVATING_INTERVENTIONIST_MONETARY_POLICY_OF_THE_EUROPEAN_CENTRAL_BANK_IN_THE_CONTEXT_OF_THE_SECURITY_OF_THE_EUROPEAN_FINANCIAL_SYSTEM

I invite you to discussion and cooperation. Greetings

The issues of risk management in the context of determinants of the global financial crisis are described in the publications:

https://www.researchgate.net/publication/323244391_Determinants_of_credit_risk_management_in_the_context_of_the_development_of_the_derivatives_market_and_the_cyclical_conjuncture_economic_processes

https://www.researchgate.net/publication/327201116_Importance_and_implementation_of_improvement_process_of_prudential_instruments_in_commercial_banks_on_the_background_of_anti-crisis_socio-economic_policy_in_Poland

https://www.researchgate.net/publication/327201132_The_role_and_application_of_Keynesian_macroeconomic_anti-crisis_theories_in_the_context_of_development_of_the_financial_system_in_Poland

https://www.researchgate.net/publication/320074785_THE_SHADOW_BANKING_AS_AN_EXAMPLE_OF_INEFFICIENCIES_IN_THE_FUNCTIONING_OF_THE_BANKING_SYSTEM_IN_POLAND

I invite you to discussion and cooperation. Greetings

In the context of the above described issues, the analysis of globalization processes of financial systems is also important.

The issues of globalization of financial and banking systems are described in the publications:

https://www.researchgate.net/publication/323244562_Adjustment_of_Polish_banks_to_international_standards_as_a_factor_of_globalization_of_the_national_financial_system

https://www.researchgate.net/publication/320061057_THE_IMPORTANCE_OF_ECONOMIC_GLOBALIZATION_IN_THE_CONTEXT_OF_THE_DEVELOPMENT_OF_THE_FINANCIAL_SYSTEM_IN_POLAND

https://www.researchgate.net/publication/327201145_Social_and_economic_determinants_of_the_processes_of_economic_globalization_that_shape_the_development_of_the_banking_system_in_Poland

https://www.researchgate.net/publication/320074691_ADMINISTRATIVE_LEGAL_AND_SUPERVISORY_DETERMINANTS_OF_GLOBALIZATION_OF_FINANCIAL_MARKETS_AND_THE_BANKING_SYSTEM_IN_POLAND

I invite you to discussion and cooperation. Greetings

Thank you very much for your participation