Operational Risk Policy

Risk Management Policy

• Planning of operational risk management.

• Identification of business lines.

• Mapping of business lines.

• Determine sources of external loss data.

• Identify process of inferring external loss data.

• Classification of loss events.

• Consolidation of loss events.

• Reporting procedure for loss events.

Mapping Business Events

• Business units

• Business lines

• Activity groups

Investment Banking Unit

Commercial Banking Unit

Other Business Units

Audit Policy of Operational Risk Management

• Fixing audit bench standards.

• Recognition of high loss events.

• Suggestive measures of risk mitigation.

• Strategies for functional departments.

• Adequacy of risk assessment.

• Compliance procedures for audit.

• Review of internal audit systems.

Technology Policy

• Procurement of systems

• Development of software

• Analysis procedures for operational risk

• Data base management

• Estimation of capital charges for technology investment

• Compilation of technology profiles

Functional Policy

• Identification of operational loss events

– Products

– Processes

– Systems

• Development of reporting formats

– Data collection

– Department reports

– Events reports

Functional Policy

• Operational risk management committee

• Business line

• Department policy

• Circle office policy

• Bank area policy

• Field level policy

Circle Office Policy

• Recognition of operational loss

• Measurement procedures

• Review of operational loss data

• Mitigation procedures

• Timely data transfer to head office

Branch Office Policy

• Identification of operational loss events.

• Preparation of operational loss reports.

• Timely transfer of data to circle office.

• Timely transfer to operational risk management committee.