Key Elements of Risk Management Process are:
- Identify: identify a danger (threat or opportunity) and record the hazards found by the owner of the risk register.
- Assess: the primary goal is to document the net effect of all identified threats and opportunities by assessing:
- Likelihood of risks;
- Impact of each risk;
- Proximity of threats; and
- Prioritisation based on scales.
- Plan: preparation of management responses to mitigate threats and maximize opportunities.
- Implement: Risk responses are actioned.
- Monitor and review: Monitor and review the risk management system’s performance and changes to business initiatives.
- Communicate: Provide regular reports to the management team / Audit and Risk Committee at agreed times.
Operational Risk Management Policy of Canara Bank
The Operational Risk Management process of the bank consists of a healthy organizational culture and sound operating procedures involving corporate values, attitudes, competencies, internal control culture, effective internal reporting, and contingency planning. Policies for the efficient management of Operating Risk in the Bank are placed in place.
Operational Risk Management Structure is as follows:
- Board of Directors
- Risk Management Committee of the Board (RMCB)
- Operational Risk Management Committee (ORMC)
- Head / General Manager – Risk Management / Group Chief Risk Officer (GCRO)
- Operational Risk Management Department (ORMD), Head Office
- Executives at Circles overseeing Risk Management Section.
- Risk Management Sections at Circles.
The Scope and Nature of Risk Reporting and/or Measurement Systems: Risk reporting consists of operational risk loss incidents/events in branches/offices relating to people, process, technology, and external events. The data collected from different sources is used to analyze the root cause/gaps in the system and thereby improve/strengthen the laid down systems and procedures. The loss incidents are also incorporated in the loss database, which shall be used for computing Operational risk Capital Charges on migrating to Advanced Measurement Approach (AMA). Policies for hedging and/or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants: Bank has put policies for management of Operational Risk management. The policy framework contains various aspects of Operational risk management such as identification, management, monitoring & mitigation of Operational risk areas. Bank strategies for the management of outsourcing risks have been put in place to resolve the risks inherent in outsourcing activities.