ICICI Bank 2013 Annual Report Download - page 198

F120
in the Operational Risk Management Policy (the Policy) approved by the Board of Directors. The Policy
aims to:
• Define Bank level operational risk appetite;
• Establish clear ownership and accountability for management and mitigation of operational risk;
• Help business and operations to improve internal controls, reduce likelihood of occurrence of operational
risk incidents and minimise potential impact of losses;
• Minimise losses and customer dissatisfaction due to failure in processes;
• Develop comprehensive operational risk loss database for effective mitigation;
• Meet regulatory requirements as set out in the guidance note on management of operational risk issued
by the RBI; and
• Compute capital charge for operational risk as per the guidelines issued by the RBI.
Operational risk management governance and framework
The Bank has a comprehensive risk governance structure in line with the RBI guidelines. Further, the Bank is
in compliance with the corporate governance requirements of Securities and Exchange Board of India (SEBI),
Companies Act and Sarbanes Oxley (SOX) Act (USA).
The Board level committees that undertake supervision and review of operational risk aspects are the Risk
Committee (RC), Fraud Monitoring Committee (FMC), Audit Committee (AC) and Information Technology
Strategy Committee (ITSC).
The executive level committees that undertake supervision and review of operational risk aspects are the
Operational Risk Management Committee (ORMC), Outsourcing Committee (OCM), Information Security
Committee (ISC), Business Continuity Management Steering Committee (BCMC), and Product and Process
Approval Committee (PAC),
The Board and the Risk Committee reviews the operational risk level and direction and the material operational
risk exposures. The Fraud Monitoring Committee reviews the fraud risk aspects. The Information Technology
Strategy Committee reviews IT risk aspects. The Audit Committee supervises the audit and compliance
related aspects. Internal Audit Department carries out audit according to the Risk Based Audit Plan and
reports the findings to the Audit Committee.
In line with the RBI guidelines, an independent Operational Risk Management Group (ORMG) was set up
in the year 2006. The Bank’s operational risk management governance and framework is defined in the
Policy. While the Policy provides a broad framework, detailed standard operating procedures for operational
risk management processes have been established. For the purpose of robust quality of operational risk
management across the Bank, the operational risk management processes of the Bank have been certified
for ISO 9001:2008 standard.
The Policy also specifies the composition, roles and responsibilities of Operational Risk Management
Committee (ORMC). ORMC is responsible for overseeing all material operational risks, responses to risk
issues and the adequacy and effectiveness of controls within a given operational risk control area.
The key elements in the operational risk management framework as defined in the Policy include:
• Identification and assessment of operational risks and controls;
• New product and processes approval framework;
• Measurement through incident and exposure reporting;
BASEL II – PILLAR 3 DISCLOSURES (CONSOLIDATED)
at March 31, 2013