ICICI Bank 2009 Annual Report Download - page 39

37Annual Report 2008-2009
The Power of Belief
procedures for operational risk management processes are established. The policy is applicable across the Bank
including overseas branches and aims to ensure clear accountability, responsibility and mitigation of operational
risk. We have constituted an Operational Risk Management Committee (ORMC) to oversee the implementation
of the Operational Risk Management framework. The policy specifies the composition, roles and responsibilities
of ORMC. The framework comprises identification and assessment of risks and controls, new products and
processes approval framework, measurement through incidents and exposure reporting, monitoring through
key risk indicators and mitigation through process & controls enhancement and insurance. We have formed an
independent Operational Risk Management Group for design, implementation and enhancement of operational
risk framework and support to business and operation groups in carrying out operational risk management.
Compliance
The Bank seeks to institute a strong culture of compliance at all levels across the organisation. The Bank has a
dedicated compliance group for ensuring regulatory compliance across all its businesses and operations. The
key functions of this group include identification and assessment and compliance related matters, review of new
products and process from a regulatory compliance perspective and ongoing monitoring and reporting. The Bank
has also put in place a group wide anti-money laundering policy approved by the Board of Directors and Know
Your Customer and transaction monitoring procedures as per RBI guidelines. The Bank reviews these policies
and procedures from time to time.
TREASURY
The treasury operations are structured along the balance sheet management function, the client-related corporate
markets business and the proprietary trading activity.
Fiscal 2009 saw very high volatility in interest rates, wide swings in liquidity conditions, global credit freeze and
wide changes in inflation levels resulting in significant movement in the yield curve at various points in time.
The government bond markets witnessed significant volatility in yields. The balance sheet management function
continued to actively manage the government securities portfolio held for compliance with SLR norms to optimise
the yield on this portfolio, while maintaining an appropriate portfolio duration given the volatile interest rate
environment. The focus of our proprietary trading operations was to maximise profits from positions across
key markets including corporate bonds, government securities, interest rate swap, equity and foreign exchange
markets. While the adverse market conditions in the first half of fiscal 2009 had an adverse impact on proprietary
trading operations, the Bank capitalised on the opportunities in the fixed income markets in the third quarter of
fiscal 2009 realising significant gains on its portfolio. The Bank’s overseas branches and subsidiaries also have
exposure to credit derivatives with investments in this portfolio representing exposures to Indian corporates.
During fiscal 2009, we sold the entire non-India linked credit derivatives portfolio on which we realised a loss of
about Rs. 4.75 billion, which had been provided for in fiscal 2008.
We provide foreign exchange and derivative products and services to our customers through our Global Markets
Group. These products and services include foreign exchange products for hedging currency risk, foreign exchange
and interest rate derivatives like options and swaps and bullion transactions. We also hedge our own market risks
related to these products with banking counterparties.
HUMAN RESOURCES
During fiscal 2009, given the uncertain operating environment and change in business strategy, we focused on
reaching out to our employees on a regular basis to ensure constant alignment with organisational goals and
strategy.
We focused on bridging the skill gap and providing skilled manpower wherever required. During fiscal 2009, we
launched the Operations Academy, Debt Service Management Academy, Corporate Banking Academy and the
Credit Academy. These job-linked, skill-enhancement academies helped in equipping employees with new skill
sets and knowledge. In addition, we continued to utilise and build on the functional academies launched during
fiscal 2008. The first batch of over 700 Probationary Officers graduated from the ICICI Manipal Academy during
fiscal 2009 and was absorbed into the Bank at managerial levels in different business groups. To further equip the
Probationary Officers with management and advanced skills, we have launched an 18 months online executive
MBA Program in collaboration with Manipal University.
We also continued our focus on learning and development to build an enhanced and effective knowledge
base widely accessible through technology-enabled platforms. During fiscal 2009 we extended our interactive
technology-based learning platform to our group companies while also expanding the scope of its modules.
We also launched tests on our mobile learning platform to constantly test and update our sales and front office
employees on product and policy changes.