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6th May 2016, 01:52 PM
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Join Date: Mar 2013
Re: Union Bank of India Risk Management

Union Bank has a very much planned and powerful Risk Management structure set up, The Risk Management capacity accomplices with the Business capacities to guarantee that capital is utilized effectively while driving quality, with a suitable exchange off in the middle of danger and returns.

CREDIT RISK
Highlights


1. The credit hazard system comprises of approaches and practices that guarantee credit danger is measured, and observed at record level and portfolio level. The Credit Risk Management arrangement alongside Real Estate Lending Policy and Collateral Management Policy address the Credit Risk identified with loaning. Credit Approving Authority, Prudential Exposure Limits, Risk Rating System, Risk Based Pricing, Portfolio Management are the different instruments for Management of Credit Risk.

2. The Bank has institutionalized and all around characterized endorsement forms for all credit proposition to minimize the acknowledge hazard related for them. The Bank has set up Credit Approval Grids at Regional Offices/Field General Manager's Offices and Central Office. The Bank has likewise created FICO score models for introduction above Rs 2 lakh and scoring model for Retail loaning plans. Whole credit arrangement of the Bank is liable to interior FICO assessment. It has FICO score movement and default likelihood information throughout the previous 8 years.

3. The Bank has actualized a LAS which consistently incorporates the whole Credit Management Process and gives a guaranteed turnaround time to transfer of advance applications on one hand and institutionalized procedures then again. It additionally covers Loan Monitoring and NPA Management.

4. The Bank always endeavors to enhance credit quality and keep up a danger profile that is assorted as far as borrowers, items and industry sorts.

OPERATIONAL RISK
Highlights


1. Far reaching frameworks and strategies, inside control framework and review are utilized as essential means for overseeing Operational Risk. The Bank has set up a Board endorsed Operational Risk Management Policy in light of Reserve Bank of India rules. Every new item presented by the Bank go through a New item Approval Process to recognize and address operational danger issues. Operational misfortune information has been caught throughout the previous four years and mapped into 8 business lines and 7 misfortune occasions. The Bank's salary is likewise mapped into 8 business lines and the Bank is in preparation to move to the Standardized Approach. It has additionally consented to join External Data Pooling activity of IBA.

2. As a decent Corporate Governance measure, The Bank has planned a Disclosure Policy to have more prominent straightforwardness in its working. It has likewise built up a Business Continuity Plan (BCP) and executed the same. BCP gives a plan itemizing an extensive variety of reactions under a problematic domain to secure its staff, resources and enthusiasm of the clients. BCP contains ventures to be held fast to both at the Preventive and additionally Recovery stage when tested with genuine episodes.

MARKET RISK
Highlights


1. Asset Liability Management Policy and Treasury Policy help the administration of Market Risk in Banking and Trading books. General obligation of dealing with the business sector hazard lies with the Asset Liability Committee (ALCO).

The Committee meets routinely and settles on the size, blend, tenor, evaluating and arrangement of different resources and liabilities. It essentially does distinguishing proof, estimation, observing and administration of liquidity and financing cost hazard. It utilizes apparatuses, for example, Ratio examination, Gap investigation reports-Structural liquidity, Dynamic Liquidity, Interest Rate Sensitivity and so on, Value at Risk, Duration Gap Analysis and so forth for administration of liquidity and loan fee dangers. The crucial center is to include esteem both from the profit point of view and from the monetary quality viewpoint.

The Bank has an autonomous mid office situated in treasury and answering to hazard administration. It guarantees consistence as far as presentation investigation, limits altered and estimation of danger touchy parameters like Value at Risk, PV01 (Present Value of 1 base point), Duration, Defeasance Period and so on and their examination.


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