Optimal credit risk management

Recent risk assessments have focused on risk analysis and management in financial reporting. Considering the Bank's activities, credit risk plays the most role in its profitability, in spite of the innovations in the banking system, the risk of non-repayment of facilities by the beneficiary is still considered as a major reason for the success of the banks. Non-payment of principal and liability under the terms of the contract, credit risk is mitigated. Among the risks inherent in banking operations, credit risk is one of the most important risks that banks are facing because it depends on the life of the bank. The increase in credit losses due to repayment of facilities and the reduction of profitability, as well as the ways to prevent banks from bankruptcy in the past decade, has expanded the idea of ​​measuring and controlling credit risk. In this regard, the Islamic banking system, taking into account its specific characteristics, has risks It is very important to identify and manage its types. So that it can design methods and standards, trainings and systems to control, reduce and prevent adverse events that have a damaging effect on the lives of the Islamic Republic's banks. Therefore, the purpose of this paper is to explain the optimal risk management approach as well as provide theoretical analysis in comparison with credit risk in Islamic banking and banking.