March 12 - Standard Chartered Bank

Risk review and disclosures under Basel II Framework for the year ended 31 March 2012
As at 31 March 2012 (Rs. in 000s)
Currency
If interest rates were to go
up by 200 basis points
If interest rates were to go
down by 200 basis points
INR 1,889,137 (1,889,137)
USD 254,567 (254,567)
EUR (57,536) 57,536
GBP (104,531) 104,531
JPY (12,000) 12,000
Total 1,969,637 (1,969,637)
As at 31 March 2011 (Rs. in 000s)
Currency
If interest rates were to go
up by 200 basis points
If interest rates were to go
down by 200 basis points
INR 564,412 (564,412)
USD 628,621 (628,621)
EUR (14,866) 14,866
GBP (67,615) 67,615
JPY (11,844) 11,844
Total 1,098,708 (1,098,708)
9. Operational Risk
OR is defined as the potential for loss arising from the failure of people, process or technology or the impact of
external events. The Bank’s exposure to OR arises as a consequence of its business activities. It is the Bank’s
objective to minimise exposure to OR, subject to cost trade-offs.
The Group Operational Risk Committee (GORC) oversees the management of OR across the Group, supported by
business, functional and country-level committees. All OR committees operate on the basis of a defined
structure of delegated authorities and terms of reference, derived from the GRC.
OR exposures are managed through consistent policies and procedures that drive risk identification, assessment,
control and monitoring. These policies and procedures are challenged and revised regularly to ensure their
ongoing effectiveness. Responsibility for the management of OR rests with business and function management
as an integral component of their first line risk management responsibilities. Group OR is responsible for setting
and maintaining standards for OR management and measurement. In addition, specialist operational Risk
Control Owners (RCOs) have responsibility for the management of OR arising from the following activities
Group-wide: legal processes, people management, technology management, vendor management, property
management, security management, accounting and financial control, tax management, corporate authorities
and structure and regulatory compliance. Each RCO is responsible for identifying risks that are material to the
Group and for maintaining an effective control environment, which includes defining appropriate policies and
procedures for approval by authorised risk committees.
Identified OR exposures are classified as ‘Low’, ‘Medium’, ‘High’ or ‘Very High’, in accordance with standard risk
assessment criteria. Risks which are outside of set materiality thresholds receive a differential level of
management attention and are reported to senior management and risk committees up to Board/MANCO level.
29