Annual Report 2012 - National Savings Bank

131ASSESSING AND MANAGING OUR RISK FACTORSRISK MANAGEMENTOperational Risk GoverningStructureThe Bank has taken action forestablishment of a suitable OrganisationStructure to manage operationalrisk under the IRM Frameworkby establishing independent unitswithin the main operational divisionsnamely Asset Management, Creditand Branch Management. Actions toestablish a Middle Ofce was takenfor asset management function toensure independence of the activities.Supervision of Credit GL, Structureof Credit Process and conductingcollateral examination of retail loansare functions established under the headofce and the branches initial functionscome under the purview of the CreditRisk Management Unit and wouldexpand in the future. The ExecutiveCompliance Committee (ECC) underthe Compliance Policy review wasestablished to take compliance mattersto the management directly.Actions were initiated during the year2012 to establish an independentunit within the Branch ManagementOperational Unit Middle Office Credit RiskManagement UnitBranch ManagementDivisionBranchesLORCsDivision to carry out independentreporting of Branch MIS, BranchEvaluations, recording of lossevent data and coordination of riskmanagement & compliance matters inthe Branch network. Also formalisedappointment of Liaison Ofcers forRisk & Compliance in branches andother operational divisions of the HeadOfce were made.Loss/Risk Event ReportingA basic structure for incident reportingmechanism is in place to streamline theloss reporting mechanism which alsoenhances the loss database covering alltypes of losses and near miss incidentsRisk & Compliance DivisionOperational Risk Management FunctionAsset ManagementDivisionCreditDivisionCreditDivisionOther DivisionsLORCsLORCs - Liaison Ofcer for Risk & Compliancethat have taken place in business linesas per Basel guidelines. Loss events ofbranches are collected and reported toRMD by the Branch Operational Unit.Other loss events are reported directlyto RMD from other divisions. TheInternal and External loss event dataare obtained from the Internal AuditDivision through their reported events.Effective reporting of these loss eventsby the operational divisions facilitatesto identify risks and respond to thempromptly in the best possible manner.NATIONAL SAVINGS BANK . ANNUAL REPORT 2012