Risk Management Framework - MSBs
Regulatory & Governance Standards
Requirements
Solutions Provided by DNM
Enterprise Wide Risk Assessments (EWRA):
- 1. Enterprise Wide Risk Assessment (EWRA)
- 2. GAP Analysis
- 3. Risk Register
- 4. Risk Management Policies & Procedures
- The benefits of effective risk management include enhancing the ability to achieve strategic and performance objectives, and increasing value to stakeholders.
- DNM performs Enterprise Wide Risk Management for MSBs, identify Risks and work closely with our clients for developing, or, maintaing and improving an adequate risk response framework.
Limits Framework (Exposure Limits, Dealers Limits, Loss Limits):
- 1. Counter Party Exposure Limits
- 2. Foreign Exchange Exposure Limit (FEEL)
- 3. Net Open Position (Currency Wise)
- 4. Dealers Dealing Limits
- 5. Cut Loss Limits
- 6. Cashiers’ Till Limits
- 7. Day End Cash Limits
- 8. Cash at Branch Counter Limits
- 9. Cash in Branch Safe Limits
- 10. Exchange Rate Limits for Valued Customers
- Monitoring of ‘Forex Currency Exposures’ within a defined limit designed on the basis of ‘Risk Appetite’.
- NOP restricts currency wise ‘Net Open Positions’ within the defined limits
- Limits ‘Dealing Amount’ of Treasury Dealers.
- Defines loss amount that a dealer may assume on running exposures.
- Outlines total exposures a bank may take on its counter parties.
- Restrict amount of total currencies a cashier may hold intra-day.
- Defines amount that a Branch may keep in Branch at the day end.
- Specifies amount a Branch may keep at the counter of the Branch.
- Identifies the amount a Branch may keep in safe at any time.
- Defines the rates, or, range of the rates (currency wise) that a Branch may offer to its customers to attract business.
- Position Risks, Exchange Rate Risks and Liquidity Management Risks are the most CRITICAL risks that every MSB business faces every day. These risks are highly technical, often remain unidentified and expose surprises to the MSB’s Management.
- DNM has highly qualified Treasury professionals who are MSB’s and Bank’s Treasury Management & Treasury experienced and may help you develop and maintain an effective ‘Risk Response System’ surrounding Position, Exchange, Liquidity, Agents & Correspondents risks.
- DNM experts design Limits structure for MSB’s Branches, Operations, Dealers as well to prevent risks of financial and reputational losses.
Risk Management Committee:
- 1. Structure of Risk Management Committee
- 2. Terms of References
- 3. Agenda Items
- 4. Reporting Pack & Presentation Deck
- 5. Structure of Minutes & Circulation
- 6. Decisions Tracking Matrix
- Exhibits Board’s Oversight.
- Enables BoD to provide ‘Knowledge Based and Informed Strategic Directions’.
- Avoids surprises in ‘Objective Achievement Process’.
- We design Risk Management Committee’s Structure, develop Terms of References (TORs), reporting packs and related documents.
- We train and develop staff on documentation, circulation and tracking timely & adequate implementation of Risk Management Committee’s decisions.