ICICI Bank 2012 Annual Report Download - page 201

F123
BASEL II – PILLAR 3 DISCLOSURES (CONSOLIDATED)
Management Group along with Operations Risk Management Group aims at anticipating risks, proactively planning for
managing such risks and being better equipped for handling/managing any uncertainties.
The finance team works under the broad framework of Asset Liability Management Policy to ensure maintenance of
adequate level of economic capital at all times.
Further, the following committees also contribute to the operational efficiency and risk management of the company:
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In addition to the above, various other policies including Prevention of Money Laundering Policy, Oversight Policy, Whistle
Blower Policy, Fraud Risk Management Policy and Prevention of Insider Trading Policy (Code of Conduct) help in mitigating
various risks faced by the Company. Further, activities such as internal audit of various business units and corporate
services, risk based compliance monitoring, risk and controls self assessment, operational risk reviews and SEBI mandated
internal audit of broking operations ensure the independent evaluation, monitoring and reporting of the risks.
18. RISK MANAGEMENT FRAMEWORK OF ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED
The policies approved by the Board of Directors form the governing framework for overall risk management. The key
policies in this regard are Anti-money laundering policy, Insider Trading Policy, Chinese Wall Policy, Conflict Resolution
Policy and Arm’s Length Policy. Business activities are undertaken within this framework. Independent groups such as
Compliance and Operational Risk have been constituted to facilitate independent evaluation, monitoring and reporting
of various risks. These groups function independent of the business groups and represent themselves at the Audit
Committee of the Board of the company and also interface with the corresponding groups at ICICI Bank for a Group level
oversight.
The Operational Risk Management function was created during fiscal 2011 to establish an operational risk management
framework in the company. The framework includes the Operational Risk Management Policy and Board-approved
process manuals. A Risk Register has also been created and maintained as a part of the Risk and Control Self Assessment
exercise involving all the departments in the company. The Register contains an inventory of risks that the company is
exposed to along with existing controls. The Operational Risk Management Committee oversees the risks and controls
within the company.
19. RISK MANAGEMENT FRAMEWORK OF ICICI PRUDENTIAL ASSET MANAGEMENT COMPANY LIMITED
ICICI Prudential AMC has in place a Risk Management Policy detailing the philosophy and procedure adopted to identify,
measure, monitor and treat/mitigate risk at the enterprise level. As per the policy, the management reviews the risk
levels and action plans at a Risk Management Committee meeting, which is convened on a quarterly basis.
The Risk Management Committee addresses a wide range of issues such as operational risk, investment risk, reputation
risk and strategic risk. Also a key risk report summarising the key risks faced by the enterprise is placed before the Audit
& Risk Committee (which is a board-level committee) and Risk Management Committee periodically.
The Risk management team carries out operational risk assessment across all business processes/lines and appraises
the Risk Committee on the key operational risk areas and suggested action plans if any to mitigate the risks.
Investment Risk oversight forms an integral part of the overall risk management framework and is guided by the Equity
Investment and Debt Investment policy for mutual funds. The process of assessment of investment risk includes
portfolio construction/asset allocation, analysis of performance of funds, review of credit/counterparty/concentration
risk, monitoring of liquidity risk in debt funds (major money market & short term funds), stress testing of liquidity risk &
impact review of trade price vs Volume-weighted average price etc. To sensitise management regarding any exceptions
in the area of investments, the investment risk oversight reporting forms part of the Risk Management Committee
agenda.
The company has in place various policies to manage operational risk such as the business continuity plan, information
technology security policy, product and process approval guidelines, procedure manuals etc.
at March 31, 2012