Operational Risk Management and Integrated Risk Management: A Comprehensive Overview
Operational Risk Management (ORM) Definition:Operational Risk Management (ORM) is the structured process of identifying, assessing, and mitigating risks that may disrupt an organization’s routine operations. Focus:ORM concentrates specifically on risks originating from internal processes, human errors, system failures, and other operational activities. Goal:The primary objectives of ORM are to protect value creation, uphold stakeholder confidence,…
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RBI Issues Draft Guidelines on Digital Banking Channels: Proposes New Compliance Norms and Ban on Third-Party Promotions
The Reserve Bank of India (RBI) has issued the draft “Digital Banking Channels Authorisation Directions, 2025”, introducing a comprehensive regulatory framework aimed at strengthening the governance, security, and transparency of digital banking services. The draft proposes significant restrictions, including a prohibition on the display of third-party products and services on banks’ digital platforms, and mandates…
Read article Active Credit Portfolio Management: A Dynamic Approach to Credit Risk and Return Optimization
Active Credit Portfolio Management (ACPM) represents a strategic and proactive methodology for managing a financial institution’s credit portfolio. Unlike traditional static approaches that focus primarily on loan origination and hold-to-maturity strategies, ACPM emphasizes dynamic decision-making, continual monitoring, and tactical adjustments to optimize risk-return outcomes and support institutional objectives. This approach is increasingly vital in today’s…
Read article Credit Control and Monitoring at the Portfolio Level
Credit control at the portfolio level refers to the strategic management of credit risk across a financial institution’s collective credit exposures. Unlike transaction-level credit management, which focuses on individual borrowers, portfolio-level credit control emphasizes optimizing the overall risk-return profile of the institution’s credit assets. This is achieved by managing concentration risks, aligning with regulatory expectations,…
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Credit Risk Policies and Guidelines at the Transaction Level
Credit risk policies and guidelines at the transaction level provide a structured approach to identifying, measuring, controlling, and monitoring credit risk on a per-loan basis. These policies are essential for ensuring that each credit decision aligns with the institution’s risk appetite, regulatory expectations, and strategic objectives. They help maintain credit discipline, minimize potential losses, and…
Credit Risk Control and Monitoring: Ensuring Sound Credit Practices
Credit risk control and monitoring are essential components of a financial institution’s risk management framework. These processes aim to identify, evaluate, manage, and mitigate the potential for losses resulting from borrowers’ failure to meet repayment obligations. Effective credit risk control not only safeguards the institution’s financial health but also ensures compliance with regulatory requirements and…
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