Mantik Journal, 7 (4) (2024), ISSN 2685-4236 (Online) Journal homepage: www.iocscience.org/ejournal/index.php/mantik Published by:Institute of Computer Science (IOCS) Jurnal Mantik Journal homepage: www.iocscience.org/ejournal/index.php/mantik Mitigating bad debt risk through the implementation of risk management at the Regional Bank of North Sumatra Nurhaflah Soraya 1 , Khairi Anshor 2 1 Accounting Department, Politeknik Negeri Medan, Indonesia 2 Business Administration Department, Politeknik Negeri Medan, Indonesia A R T I C L E I N F O ABSTRACT Article history: Received Jan 05, 2024 Revised Jan 09, 2024 Accepted Jan 20, 2024 Bank operational activities have a significant impact on the economy and therefore require regulations that can minimise potential risks that may occur. The purpose of this study is to review the implementation of risk management in depth at the Regional Bank of North Sumatra. This study uses secondary data from annual reports published during 2018-2022. This research is a descriptive research that will be described through data on credit risk, risk management and bad debts. The results of this study indicate that the Regional Bank of North Sumatra has successfully implemented risk management well even though there are some limitations in the process. Keywords: Bad Debt; Credit Risk; Risk Management; Risk Mitigation. This is an open access article under the CC BY-NC license. Corresponding Author: Nurhaflah Soraya, Accounting Department Politeknik Negeri Medan Address Almamater Street No 1, Medan, North Sumatra, 20155, Indonesia. Email: nurhaflah@polmed.ac.id 1. INTRODUCTION Bank failures have a significant impact on the economy and banking system. As the country's monetary institution, Bank Indonesia places great emphasis on regulation and supervision of every aspect of bank operations to ensure optimal management and minimize potential risks (Aviani et al., 2014).In order to implement risk management for commercial banks, BI has passed Bank Indonesia Regulation Number 11/25/PBI/2009. The regulation details the minimum standards that banks in Indonesia must adhere to in determining risk management. The regulation requires banks to categorize risks into eight different risk types, which must be managed accordingly. These risk types include market, credit, liquidity, operational, reputation, legal, strategic, and compliance risks. (Herman Darmawi, 2013) explains that risk relates to potential negative consequences, such as losses that cannot be predicted. Though the company has insured its risks, it does not mean that the company is fully protected (Kumala Dewi, 2023). Insurance companies only bear part of the risk. Most of the company's other risks must be faced alone and cannot be transferred to insurance companies (Andriani, 2015). This is what makes risk management a must to be implemented in banking. (Ekonomi et al., n.d.) Risk management is the process of anticipating risks to avoid losses to the company. With the implementation of risk management in banking, banks have longer asset resilience and are able to monitor information easily so that they can predict