The following diagram presents our overall framework to management of the risk.
The Bank’s risk management framework guides the Bank to manage the risk effectively. The framework sets clear roles and responsibilities for the management of the risk. Further, the Bank has developed the risk appetite, which identifies the amount of capital, earnings or liquidity the Bank is willing to put at risk. The business units operate within the operational limits, market limits or credit limits as the case may be, and effective reporting mechanism is in place for reporting on limit breaches and accountability for breaches.
The process employed by the Bank includes in sequential order; identify, measure, control, monitor and report. Risk is identified by incorporating the input from the front-line units and control functions. Post Identification, the risk is quantified using various quantification models. The Bank carries regular monitoring of the risk to track adherence to risk appetite, policies, procedures and standards. This includes the identification and escalation of the breaches.