Abstract:
PURPOSE:
This study aims to examine the relationship between internal control and credit risk in
Pakistani commercial banks from 2002 to 2021. Additionally, the study will consider
various bank-specific characteristics and macroeconomic factors and how they
influence credit risk in these banks: Total credit to total deposit, Total earning to total
asset, Net interest margin, Equity to total asset ratio, TIER 1 Capital & Total Assets
(TA). By using the dataset of 11 Pakistani commercial banks.
METHODOLOGY:
This research has been designed with a systematic process to ensure its
trustworthiness. To verify the findings ofthe study, secondary data has been analyzed
using empirical, quantitative methods.
FINDINGS:
This study shows that there are Inflation rate & Bank Size variables are directly
influencing, and GDP & Unemployment rate variables are inversely influencing the
credit risk ofthe banking sector in Pakistan.
ORIGINALITY:
This Study measures the factors affecting the credit risk ofbanking sector in Pakistan
using NIM, TC to TD, Cost Inefficiency, Total Assets, Equity to Total Asset, TIER 1
Capital & Bank Sector Development as variables. This study also uses macro economic variables like Inflation Rate, Unemployment Rate, GDP & Bank Size.
