ICICI Bank 2012 Annual Report Download - page 16

O The Risk Committee of the Board reviews risk management policies of the Bank in relation to
various risks. The Risk Committee reviews various risk policies pertaining to credit, market, liquidity,
operational and outsourcing risks, review of the Bank’s stress testing framework and group risk
management framework. The Committee reviews the risk profile of the Bank through periodic
review of the key risk indicators and risk profile templates and annual review of the Internal
Capital Adequacy Assessment Process (ICAAP). The Committee also reviews the risk profile of
its overseas banking subsidiaries annually. The Risk Committee reviews the Bank’s compliance
with risk management guidelines stipulated by the Reserve Bank of India and of the status of
implementation of the advanced approaches under the Basel framework. The Risk Committee also
reviews the stress-testing framework as part of the ICAAP. The stress-testing framework included
a wide range of Bank-specific and market (systemic) scenarios. Linkage of macroeconomic factors
to stress test scenarios was documented as a part of ICAAP. The ICAAP exercise covers the
domestic and overseas operations of the Bank, the banking subsidiaries and the material non-
banking subsidiaries. The Risk Committee also reviews the Liquidity Contingency Plan (LCP) for the
Bank and the threshold limits. During the year the Bank has also finalised the approach towards
Enterprise Risk Management framework.
O Apart from sanctioning credit proposals, the Credit Committee of the Board reviews developments
in key industrial sectors and the Bank’s exposure to these sectors as well as to large borrower
accounts. The Credit Committee also reviews the non-performing loans, accounts under watch,
overdues and incremental sanctions.
O The Audit Committee of the Board provides direction to and monitors the quality of the internal
audit function and also monitors compliance with inspection and audit reports of Reserve Bank of
India and statutory auditors.
O The Asset Liability Management Committee is responsible for managing liquidity and interest rate
risk and reviewing asset-liability position of the Bank.
A summary of reviews conducted by these Committees are reported to the Board on a regular basis.
Policies approved from time to time by the Board of Directors/Committees of the Board form the
governing framework for each type of risk. The business activities are undertaken within this policy
framework. Independent groups and sub-groups have been constituted across the Bank to facilitate
independent evaluation, monitoring and reporting of various risks. These groups function independently
of the business groups/sub-groups.
The Bank has dedicated groups, namely, the Risk Management Group, Compliance Group, Corporate
Legal Group, Internal Audit Group and the Financial Crime Prevention & Reputation Risk Management
Group, with a mandate to identify, assess and monitor all of the Bank’s principal risks in accordance with
well-defined policies and procedures. Risk Management Group is further organised into the Credit Risk
Management Group, Market Risk Management Group and Operational Risk Management Group. These
groups are completely independent of all business operations and coordinate with representatives
of the business units to implement ICICI Bank’s risk management policies and methodologies. The
internal audit and compliance groups are responsible to the Audit Committee of the Board.
CORPORATE GOVERNANCE
The corporate governance framework at ICICI Bank is based on an effective independent Board, the
separation of the Board’s supervisory role from the executive management and the constitution of Board
Committees, generally comprising a majority of independent Directors and chaired by independent
Directors, to oversee critical areas.
Directors’ Report
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