This study looks at how Punjab National Bank (PNB) handles credit risk, using information from its annual reports and financial statements. It explores how well PNB manages financial risks and remains profitable by carefully reviewing loan applications, managing bad loans, and adhering to banking rules. To understand how these methods affect the bank’s financial health, the study uses key numbers like the Loan-to-Deposit Ratio and Profit to Assets Ratio. The results show that good credit risk management helps reduce loan defaults and improve the quality of the bank’s assets. However, challenges like economic ups and downs and unreliable borrowers still make things difficult. This highlights the need for flexible and strong risk management practices. Overall, the study provides valuable insights into PNB’s credit risk practices and their implications for maintaining financial soundness and operational efficiency.