Risk Management Essay

2583 Words Aug 4th, 2011 11 Pages
Risk management

In this section a summarized position of various risks facing DBBL while conducting its business and operations and steps taken by the Bank to effectively manage and mitigate such risks are discussed.

RISK MANAGEMENT FRAMEWORK

Risk is defined by DBBL as risk of potential losses or foregone profits that can be triggered by internal and external factors. Therefore, the objectives of risk management are identification of potential risks in our operations and transactions, in our assets, liabilities, income, cost and off-balance sheet exposures and independent measurement and assessment of such risks and taking timely and adequate measures to manage and mitigate such risks within a risk-return framework. In DBBL, only
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Through delegated authority, management committees, like ALCO and Credit Committee, also oversee and ensure that sufficient risk management systems are in place and these are consistently applied to protect the interest of the Bank.

RISK MANAGEMENT PROCEDURE

Approved predetermined policies and guidelines
To ensure that risks are properly addressed and protected for sustainable development of the Bank, there are approved policies and procedures covering all the risk areas i.e. credit risks, operational risks and market risks. These are formulated taking into account Bangladesh Bank's Guidelines on managing Core Risks on Credit Risk Management, Internal Control & Compliance, Asset and Liability Management, Foreign Exchange Risk Management, Information Technology Risk Management and Money Laundering Risk Management as well as the business environment in which the Bank operates, specific needs for particular type of operations or transactions and international best practice. These policies are regularly reviewed and updated to keep pace with the changing operating environment, technology and regulatory requirement. Meticulous compliance with the established procedures are ensured to satisfy that the Bank is operating within approved procedures and limits and that risks are within

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